Ivan Shchapov

Ivan Shchapov

I am a Ph.D. Candidate in Economics at Institut Polytechnique de Paris (CREST) and a Stipendiary Lecturer at École Polytechnique.

My research focuses on monetary economics, fiscal policy, financial stability, and international macroeconomics.

I am on the Academic Job Market in November 2025.

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Job market paper

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This paper analyses the effects of central bank balance sheet policies on financial and price stability in a framework with endogenous disruptions in financial intermediation. Central bank balance sheet expansions increase the frequency of financial stress episodes and their duration by inducing financial intermediaries to take on more risk in normal times and slowing their recapitalisation during a stress episode. Rapid monetary policy tightening induces financial stress which can be mitigated by central bank balance sheet expansions at significant cost to price stability. The optimal monetary policy mix balances welfare costs of inflation and financial stess, and efficiency costs of balance sheet expansions. Optimal policy leans towards prevention of financial stress via accommodative conventional policy and limited balance sheet interventions.

Publications

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Japan has faced rapid ageing, persistently low interest rates, sluggish growth, and deflation for decades. Concurrently, there has been a gradual convergence in productivity between young and elderly workers. This paper aims to explore the relationship between productivity, demographic shifts, and interest rates in Japan during the post-bubble era, using an overlapping generations two-agent New Keynesian (OTANK) DSGE model. The narrowing productivity gap between younger and older cohorts puts upward pressure on interest rates. Meanwhile, factors such as longer life expectancy and negative population growth rates exert downward pressure on interest rates. The latter effect dominates. A central bank that does not account for this when setting monetary policy may induce deflationary pressure in the economy. Important policy implications emerge: Enhancing worker productivity across workers’ entire life-cycle and bridging the productivity gap between younger and older workers can help offset the decline in interest rates, and monetary policy ought to account for shifting demographics.

Working Papers

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The presence of an occasionally binding constraint due to the effective lower bound (ELB) in New Keynesian models generally gives rise to multiple equilibria under active monetary policy. To restore uniqueness in the model with an active Taylor rule, we consider appropriate simple fiscal policy instruments. Without relaxing the assumptions of Ricardian equivalence, full information, and rational expectations, we show that appropriate fiscal targeting rules ensure that New Keynesian models subject to the ELB possess a unique solution.

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This paper explores the interaction between monetary policy and financial inclusion with the introduction of a central bank digital currency (CBDC). Using a New-Keynesian two-agent framework, we show that CBDCs can enhance welfare for unbanked households by providing an interest-bearing savings tool that facilitates consumption smoothing in response to monetary policy shocks. However, higher CBDC rates, while beneficial to unbanked households, reduce welfare for banked households due to tax redistribution effects. A Ramsey optimal policy exercise demonstrates that a social planner would typically set the CBDC rate to maintain a constant spread relative to the policy rate to maximise welfare. These findings emphasise the importance of tailoring CBDC design to an economy’s level of financial inclusion.

[SSRN] [Paper PDF]

The presence of an occasionally binding constraint from the effective lower bound (ELB) in New Keynesian models often leads to multiple or no equilibria. The problem stems from a strong feedback loop between expectations (of inflation and output) and current outcomes at the ELB. We show that simple fiscal policy rules can introduce additional stabilising forces that dampen this loop, thereby ensuring the existence and uniqueness of an equilibrium.

Works in Progress

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