Ricardo J. Caballero


Ricardo Jorge Caballero is a Chilean macroeconomist who is the Ford International Professor of Economics at the Massachusetts Institute of Technology. He also served as the Chairman of MIT's Economics Department from 2008 to 2011. He is a director of the World Economic Laboratory at MIT and an NBER Research Associate. Caballero received his PhD from MIT in 1988, and he taught at Columbia University before returning to the MIT faculty.
His latest work has focused on Risk-Centric Macroeconomics and Safe Assets. He has also studied the aggregate behavior of economies with heterogeneous agents, the macroeconomic effects of irreversible investment in firm-specific assets, and Schumpeterian theories of technological progress through creative destruction.

Awards and fellowships

Caballero is the recipient of the 2022 Banque de France-Toulouse School of Economics Senior Prize in Monetary Economics and Finance.
In 2002, Caballero was awarded the Econometric Society's Frisch Medal with Eduardo Engel for their paper Explaining Investment Dynamics in U.S. Manufacturing: A Generalized Approach. He was awarded the Smith Breeden Prize by the American Finance Association for “Collective Risk Management in a Flight to Quality Episode”, Journal of Finance, 63, October 2008 and the Journal of Finance 2014 Brattle Group Prize for distinguished papers for “Fire Sales in a Model of Complexity,” joint with Alp Simsek.
In April 1998, Caballero was elected a Fellow of the Econometric Society and subsequently of the American Academy of Arts and Sciences in April 2010.

Selected reading

  • “Monetary Policy and Asset Price Overshooting: A Rationale for the Wall/Main Street Disconnect,” Journal of Finance, Vol. 79, No. 3, May 2024, pp. 1719–1753,
  • “A Note on Temporary Supply Shocks with Aggregate Demand Inertia,” American Economic ''Review: Insights, Vol. 5, No. 2, June 2023, pp. 241–258
  • “Monetary Policy with Opinionated Markets,” American Economic Review, Vol. 112, No. 7, July 2022, pp. 2353–2392
  • Global Imbalances and Policy Wars at the Zero Lower Bound Review of Economic Studies 88.6 : 2570–2621
  • A Model of Endogenous Risk Intolerance and LSAPs: Asset Prices and Aggregate Demand in a "Covid-19" Shock The Review of Financial Studies 34.11
  • A Risk-centric Model of Demand Recessions and Speculation Quarterly Journal of Economics 135.3
  • A Model of Fickle Capital Flows and Retrenchment Journal of Political Economy 128.6
  • Missing Aggregate Dynamics and VAR Approximations of Lumpy Adjustment Models SSRN
  • Reach for Yield and Fickle Capital Flows AEA Papers and Proceedings : 493-498
  • Fire Sales in a Model of Complexity The Journal of Finance 68.6 : 2549-2587
  • Collective Risk Management in a Flight to Quality Episode Journal of Finance 63.5 : 2195-2230
  • “Zombie Lending and Depressed Restructuring in Japan,” American Economic Review, 2008, Vol. 98, No. 5, pp. 1943–1977
  • “An Equilibrium Model of ‘Global Imbalances’ and Low Interest Rates,” American Economic Review, Vol. 98, No. 1, March 2008, pp. 358-393
  • Explaining Investment Dynamics in U.S. Manufacturing: A Generalized Approach July 1999, Econometrica 67, 783-826.
  • “The Cleansing Effect of Recessions” American Economic Review, Vol. 84, No. 5, December 1994, pp. 1350–1368.
  • “How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth,” in NBER Macroeconomics Annual 1993, Cambridge: The MIT Press, 15-86
  • “On the Sign of the Investment Uncertainty Relationship,”American Economic Review,'' Vol. 81, No. 1, March 1991, pp. 279–288