Portrait of Dr Alfred Duncan

Dr Alfred Duncan

Lecturer in Economics


Alfred Duncan is a Lecturer in Economics and joined the School of Economics in August 2016.

His main research area is macroeconomics with incomplete financial markets. Some of his current research projects focus on how business cycle risks are shared in decentralised trade and the consequences for this trade on business cycle volatility and labour market outcomes. 

He is also a member of the Macroeconomics, Growth and History Centre (MaGHiC).

Research interests

Details on Alfred's research can be found on his personal website.



Administrative roles

  • Academic Discipline Co-ordinator



  • Duncan, A. and Nolan, C. (2019). Reform of the UK Financial Policy Committee. Scottish Journal of Political Economy [Online]. Available at: https://doi.org/10.1111/sjpe.12228.
    We argue that: The FPC should have a wider remit; a much broader membership (covering many specialisms); should be wholly independent of Government and outside the Bank of England; its aim should be to comment publicly and authoritatively on any possible areas of risk to financial stability whilst itself controlling few if any levers of policy. The rationale for these conclusions is that: Macroprudential/financial risks come from many sources; many of these sources are structural and outside of the Bank’s regulatory purview/competence; in a sense the Bank gets to mark its own homework as regards issues such as the SMR, Resolution, appropriateness of capital, effectiveness of ring-fencing etc.; many aspects of macroprudential actions have distributional implications, and so politicians, not the Bank or any other body, should take and justify, or not, these decisions.
  • Duncan, A. and Nolan, C. (2019). Disputes, Debt and Equity. Theoretical Economics [Online] 14:887-925. Available at: https://doi.org/10.3982/TE2574.
    We show how the prospect of disputes over firms’ revenue reports promotes debt financing over equity. This is demonstrated in a costly state verification model with a risk averse entrepreneur. The prospect of disputes encourages incentive contracts that limit penalties and avoid stochastic monitoring, even when the lender can commit to stochastic monitoring. Consequently, optimal contracts shift from equity toward standard debt. In short: When audit signals are weakly correlated with true incomes, standard debt contracts emerge as optimal; if audit signals are highly correlated with true incomes, optimal contracts resemble equity. When audit costs are sufficiently high, stochastic monitoring may be optimal. Optimal standard debt contracts under imperfect audits are shown to reproduce key empirical facts of US firm borrowing.

Book section

  • Duncan, A. and Nolan, C. (2018). Financial Frictions in Macroeconomic Models. In: Oxford Research Encyclopedia of Economics and Finance. Oxford University Press. Available at: http://dx.doi.org/10.1093/acrefore/9780190625979.013.168.
    In recent decades, macroeconomic researchers have looked to incorporate financial
    intermediaries explicitly into business-cycle models. These modeling developments have
    helped us to understand the role of the financial sector in the transmission of policy and
    external shocks into macroeconomic dynamics. They also have helped us to understand
    better the consequences of financial instability for the macroeconomy. Large gaps remain
    in our knowledge of the interactions between the financial sector and macroeconomic
    outcomes. Specifically, the effects of financial stability and macroprudential policies are
    not well understood.


  • Duncan, A. (2016). Private Information and Aggregate Risk Sharing. University of Glasgow.
    When individuals have private information about their own luck and income, the sharing of idiosyncratic risks is hampered by moral hazard. This friction also affects the optimal sharing of aggregate risks. Optimal allocations restrict the exposure of low wealth agents’ consumption to business cycle risk. This encourages truth-telling by high wealth agents who have a high tolerance for aggregate risk, thereby increasing the extent to which idiosyncratic risks can be shared. Implementation of these optimal allocations requires restrictions in the trade of securities contingent on aggregate outcomes.
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