Pierre-Olivier Gourinchas | Clausen Center

Pierre-Olivier Gourinchas

Clausen Center Director and Professor

Department of Economics and Economic Analysis and Policy Group, Haas School of Business

Pierre Olivier Gourinchas is professor in the Economics department and Haas School of Business at the University of California, Berkeley, and faculty director of the Clausen Center for International Business and Policy. He is a member of the French Council of Economic Advisors, and Editor-in-Chief of the IMF Economic Review, Research Fellow at the Center for Economic Policy Research, and Research Associate at the National Bureau of Economic Research (Cambridge, Massachusetts). His main research interests are in international macroeconomics and finance. His recent research focuses on the importance of the valuation channel for the dynamics of external adjustment and the determination of exchange rates; the determinants of capital flows to and from developing countries; on international portfolios; global imbalances; international price discrimination; and the global financial crisis.

Summary of recent papers:

Rents, Technical Change, and Risk Premia Accounting for Secular Trends in Interest Rates, Returns on Capital, Earning Yields, and Factor Shares

Coauthors: Ricardo J. Caballero (MIT), Emmanuel Farhi (Harvard),

Date: March 21, 2017

Citation: Working Paper

The secular decline in safe interest rates since the early 1980s has been the subject of considerable attention. This short paper argues that it is important to consider the evolution of safe real rates in conjunction with three other first-order macroeconomic stylized facts: the relative constancy of the real return to productive capital, the decline in the labor share, and the decline and subsequent stabilization of the earnings yield. Through the lens of a simple accounting framework, these four facts offer insights into the economic forces that might be at work.


Dominant Currency Paradigm A New Model for Small Open Economies

Coauthors: Camila Casas (Banco de la Republica), Federico J. Dıez (Federal Reserve Bank of Boston), Gita Gopinath (Harvard)

Date: December 8, 2016

Citation: Working Paper

Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) terms of trade are stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports and export expansions following depreciations are weak. Using merged firm level and customs data from Colombia we document strong support for the dominant currency paradigm and reject the alternatives of producer currency and local currency pricing.