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Dr Alfred Duncan
Lecturer in Financial Macroeconomics
School of Economics, Keynes College, D1.01
- A.J.M.Duncan@kent.ac.uk
- +44 (0) 1227 816527
About
Alfred Duncan is a Lecturer in Financial Macroeconomics 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.
Alfred is a member of the Macroeconomics, Growth and History Centre (MaGHiC).
Publications
Alfred's publications can be found on RePEc and Google Scholar.
His personal website can be found here.
Also view these in the Kent Academic Repository
Monograph
Duncan, A. (2016). Private information and aggregate risk sharing. University of Glasgow.
Abstract | View in KAR | View Full Text
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.
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.
Forthcoming
Duncan, A. and Nolan, C. (2019). Disputes, Debt and Equity. Theoretical Economics [Online]. Available at: https://econtheory.org/ojs/index.php/te/article/viewForthcomingFile/2574/22722/1.
Abstract | View in KAR | View Full Text
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.
Research
Research interests
Details on Alfred's research can be found on his personal website.
Teaching
Undergraduate
Further details on Alfred's teaching can be found on his personal website.
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