PDF CV
Education
Ph.D. - University of Oregon (2013)
B.S. in Economics and Mathematics - Westminster University (2008)
Academic Positions
University of Sydney - Associate Professor 2024 - present
University of Sydney - Senior Lecturer 2018 - 2024
Keio University - Global Professor (Guest) 2023 Jun - Sep
UNSW Sydney - Lecturer 2013 - 2018
University of Oregon - Graduate Teaching Fellow 2008 - 2013
Policy Positions
Reserve Bank of New Zealand - Economic Consultant 2025 - present
Reserve Bank of Australia - Economic Research Advisor 2017 - 2023
Bank of Finland - Visiting Scholar 2019 and 2024
Reserve Bank of Australia - Visiting Economist 2016 - 2017
Publications
Evans G.W., Gibbs C.G. and McGough B., 2025, "A unified model of learning to forecast." American Economic Journal: Macroeconomics. 17(2), 101-133
Online appendix
Gibbs, C.G. and Xin, H.W., 2024, "The sacrifice ratio and active fiscal policy," Economics Letters, 245(12), 112038
Online appendix. This is work based on Herbert's masters thesis.
Gibbs C.G. and Andrey V., 2024, "Conditionally Optimal Weights and Forward-Looking Approaches to Combining Forecasts", International Journal of Forecasting, 40, 1734-1751
Online appendix available here.
Gibbs C.G. and McClung N., 2023, "Does my model predict a forward guidance puzzle?" Review of Economic Dynamics, 51, 393-423
Code to replicate the figures in the text and reproduce the analysis found in the paper may be downloaded here.
Gelfer, S., & Gibbs, C. G., 2023. Measuring the effects of large-scale asset purchases: The role of international financial markets and the financial
accelerator. Journal of International Money and Finance, 131, 102791.
Gibbs, C.G., Nodari, G. and Hambur J., 2021 "Housing and Commodity Investment Booms in a Small Open-Economy," Economic Record, v. 97, no. 317, 212-242
RBA Research Discussion Paper from 2018. Replication files may also be downloaded from the RBA's website.
Gibbs, C.G., 2018, "Learning to Believe in Secular Stagnation," Economics Letters. 163(2), 50-54
Appendix B explores the E-stability properties of the liquidity trap equilibrium of Schmitt-Grohe and Uribe (2016)
Cuffe, H.E. and Gibbs C.G., 2017, "The Effect of Payday Lending Restrictions on Liquor Sales," Journal of Banking & Finance, 85(12), 132-145,
Media coverage: Washington Post, Economist's View, BusinessThink
SSRN Top Ten download list for ERN: Urban Economics & Public Policy and ERN: Other Microeconomics: Intertemporal Consumer Choice & Savings
Gibbs, C.G. and Kulish, M., 2017, "Disinflations in a model of imperfectly anchored expectations," European Economic Review, 100(11), 157-174
Online appendix. Replication files.
Gibbs, C.G., 2017, "Forecast combination, non-linear dynamics, and the macroeconomy," Economic Theory, 63(3), 653-686
DOI 10.1007/s00199-016-0951-x
Mathematica files containing the proofs for Lemma 1 and Lemma 2; Files to replicate key results for the Lucas monetary model and the Fisherian model.
Working paper version available here.
Grants
ARC Discover Project 210101204, "Economic Policy when Interest Rates are Zero," $329,706
Joint with Bruce Preston (UNSW Sydney) and Stefano Eusepi (Brown University)
Working Papers
Monetary policy as insurance - with Stefano Eusepi (UT Austin) and Bruce Preston (UNSW Sydney)
This is new draft (January 2026). Two previous versions have circulated under the title Monetary Policy Trade-offs at the Zero Lower Bound" and "Forward Guidance with Unanchored Expectations." Technical Appendix
Abstract: We study zero interest-rate policy in response to a large negative demand shock of uncertain duration. When individuals must learn over time about the general equilibrium effects of forward guidance policy the optimal policy features an important insurance principle: the central bank makes large front-loaded promises to stabilize expectations. Because of this, the optimal policy will appear ``too stimulatory" in the event the shock turns out to be transitory---precisely because it provides insurance against the risk of a persistent shock. Optimal state-contingent policy is well-approximated by calendar-based forward guidance.
Boundedly rational expectations and the optimality of flexible average inflation targeting - with Anthony Brassil (RBA) and Callum Ryan (RBA)
This is a new draft (February 2026) Technical Appendix
Abstract: Expectations play a central role in the transmission of monetary policy, but how people form expectations is widely debated. We study optimal monetary policy design in a model with behavioral expectations that nests rational and adaptive learning beliefs as special cases, and approximates the aggregate implications of several bounded-rationality theories. We show that optimal policy is robustly characterized by a single policy framework across expectation theories: Flexible Average Inflation Targeting. Distinct from existing characterizations of such policies, we make precise what flexible and average mean, and how they depend on expectation formation and constraints faced by the central bank (imperfect information and the zero lower bound).
Resolving New Keynesian Puzzles - with Maria Eskelinen (Oxford) and Nigel McClung (Bank of Finland)
Abstract: New Keynesian models generate puzzles when confronted with the zero lower bound (ZLB) on nominal rates, such as the forward guidance puzzle and the paradox of flexibility. We show that these puzzles are resolved when monetary policy maintains a consistent history-dependence before, during, and after a ZLB episode. History dependent policy is both welfare-maximizing in theoretical models and an empirically supported description of real-world monetary policy. We show how to write monetary policy rules that preserve the same history dependence and policy objectives with and without the ZLB to resolve the puzzles in any New Keynesian model.
Expectations and the Empirical Fit of DSGE Models - with Eric Gaus (Haverford College) - (2020)
Abstract: This paper studies the improvement in empirical fit of dynamic stochastic general equilibrium (DSGE) models that assume adaptive learning in lieu of rational expectations (RE). The literature finds that estimated DSGE models with adaptive learning generate near universal improvements in fit, while inference on structural parameters is mostly unchanged. Improvements are attributed to the increased persistence generated by backward-looking expectations. We show, however, that improvements often result from altered cross-equation restrictions and not additional persistence assumptions. Nested comparisons of Euler-equation and infinite-horizon adaptive learning both significantly improve upon RE but only the latter's improvements are due to expectation formation. Bounded rationality assumptions offer an intuitive way to improve both in-sample and out-of-sample DSGE model fit. But our results suggest that learning models best-capture persistent deviation in beliefs from fundamentals rather than temporary deviations at business cycle frequencies.
Strongly Rational Routes to Randomness - (2016)
Abstract: Many behavioral models of expectation formation in macroeconomics and finance assume agents choose from a menu of predictor rules over time to construct forecasts. The menus often include a costly rational predictor that yields a correct prediction taking into account the heterogeneity of expectations. In this paper, I study the eductive justification of this rational predictor in the sense of Guesnerie (2002). I show that the condition for eductive stability is strictly weaker than in the homogeneous expectations case under commonly held assumptions. This implies that many rational routes to randomness identified by Brock and Hommes (1997) are actually strongly rational and that rational forecasting behavior is not necessarily ruled out when eductive stability in the homogeneous expectations case fails. The latter has implications for when rational behavior may occur in laboratory experiments on expectations.
Work in Progress
"Do low interest rates predict financial crises?'' - with Tristan Truuvert (University of Sydney)
Book Reviews
Gibbs, C. G. (2022) Fully Grown: Why a Stagnant Economy is a Sign of Success, by Dietrich Vollrath, Economic Record, v. 98, no. 322, 322-324
Conference Presentations
Melbourne Institute Macroeconomic Policy Workshop - Melbourne (2025)
e61 and UNSW Macroeconomic Policy Workshop - Sydney (2025)
Australian Conference of Economists - Sydney (2025)
Reserve Bank of Australia Quantitative Macroeconomics Workshop - Sydney (2024)
Expectations in Dynamic Macroeconomic Models Conference - Adelaide (2024)
Workshop of the Sydney Macro Reading Group - UNSW Sydney (2024)
NBER Summer Institute: Methods and Applications for Dynamic Equilibrium Models Program - Boston (2024)
Workshop of the Sydney Macro Reading Group - Reserve Bank of Australia (2024)
Ozmac - Monash University (2023)
Econometric Society Australasian Meetings - UNSW Sydney (2023)
Virtual Australian Macroeconomics Seminar Workshop (in person) - University of Sydney (2022)
Workshop of Australasian Macroeconomic Society - University of Sydney (2022)
Continuing Education in Macroeconomics Workshop - Monash University (2022)
Barcelona Summer Forum: Expectations in Dynamic Macroeconomic Models Conference (2022)
Expectations in Dynamic Macroeconomic Models Conference - Czech National Bank (2021)
Workshop of the Sydney Macro Reading Group - Reserve Bank of Australia (2019)
Symposium of the Society for Nonlinear Dynamics and Econometrics - FRB Dallas, USA (2019)
Expectations in Dynamic Macroeconomic Models Conference - University of Birmingham (2018)
Symposium of the Society for Nonlinear Dynamics and Econometrics - Tokyo, Japan (2018)
WEAI Conference - San Diego, CA (2017)
Symposium of the Society for Nonlinear Dynamics and Econometrics - Paris, France (2017)
Workshop of the Sydney Macro Reading Group - University of Sydney (2016)
Workshop of the Australasian Macroeconomic Society - UNSW Australia (2015)
Expectations in Dynamic Macroeconomic Models Conference - University of Oregon (2015)
Continuing Education in Macroeconomics - University of Tasmania (2014)
Symposium of the Society for Nonlinear Dynamics and Econometrics - NY, NY (2014)
Continuing Education in Macroeconomics - UNSW, Sydney NSW (2013)
Expectations in Dynamic Macroeconomic Models Conference - Federal Reserve Bank of San Francisco (2013)
Canadian Economic Association Meetings - HEC Montreal (2013)
32th Annual International Symposium on Forecasting - Boston, MA (2012)
Served as Referee for
Journal of Political Economy
Econometrica
Review of Economic Studies
American Economic Journal: Macroeconomics
Journal of Monetary Economics
Review of Economics and Statistics
Review of Economic Dynamics
European Economic Review
Journal of Banking & Finance
Journal of International Money and Finance
Journal of Money Credit & Banking
Journal of Economic Behavior and Organization
Macroeconomic Dynamics
International Journal of Central Banking
Journal of Economic Dynamics and Control
Economic Inquiry
Studies in Nonlinear Dynamics and Econometrics
Journal of Macroeconomics
Journal of Economic Surveys
Economic Record
Education
Ph.D. - University of Oregon (2013)
B.S. in Economics and Mathematics - Westminster University (2008)
Academic Positions
University of Sydney - Associate Professor 2024 - present
University of Sydney - Senior Lecturer 2018 - 2024
Keio University - Global Professor (Guest) 2023 Jun - Sep
UNSW Sydney - Lecturer 2013 - 2018
University of Oregon - Graduate Teaching Fellow 2008 - 2013
Policy Positions
Reserve Bank of New Zealand - Economic Consultant 2025 - present
Reserve Bank of Australia - Economic Research Advisor 2017 - 2023
Bank of Finland - Visiting Scholar 2019 and 2024
Reserve Bank of Australia - Visiting Economist 2016 - 2017
Publications
Evans G.W., Gibbs C.G. and McGough B., 2025, "A unified model of learning to forecast." American Economic Journal: Macroeconomics. 17(2), 101-133
Online appendix
Gibbs, C.G. and Xin, H.W., 2024, "The sacrifice ratio and active fiscal policy," Economics Letters, 245(12), 112038
Online appendix. This is work based on Herbert's masters thesis.
Gibbs C.G. and Andrey V., 2024, "Conditionally Optimal Weights and Forward-Looking Approaches to Combining Forecasts", International Journal of Forecasting, 40, 1734-1751
Online appendix available here.
Gibbs C.G. and McClung N., 2023, "Does my model predict a forward guidance puzzle?" Review of Economic Dynamics, 51, 393-423
Code to replicate the figures in the text and reproduce the analysis found in the paper may be downloaded here.
Gelfer, S., & Gibbs, C. G., 2023. Measuring the effects of large-scale asset purchases: The role of international financial markets and the financial
accelerator. Journal of International Money and Finance, 131, 102791.
Gibbs, C.G., Nodari, G. and Hambur J., 2021 "Housing and Commodity Investment Booms in a Small Open-Economy," Economic Record, v. 97, no. 317, 212-242
RBA Research Discussion Paper from 2018. Replication files may also be downloaded from the RBA's website.
Gibbs, C.G., 2018, "Learning to Believe in Secular Stagnation," Economics Letters. 163(2), 50-54
Appendix B explores the E-stability properties of the liquidity trap equilibrium of Schmitt-Grohe and Uribe (2016)
Cuffe, H.E. and Gibbs C.G., 2017, "The Effect of Payday Lending Restrictions on Liquor Sales," Journal of Banking & Finance, 85(12), 132-145,
Media coverage: Washington Post, Economist's View, BusinessThink
SSRN Top Ten download list for ERN: Urban Economics & Public Policy and ERN: Other Microeconomics: Intertemporal Consumer Choice & Savings
Gibbs, C.G. and Kulish, M., 2017, "Disinflations in a model of imperfectly anchored expectations," European Economic Review, 100(11), 157-174
Online appendix. Replication files.
Gibbs, C.G., 2017, "Forecast combination, non-linear dynamics, and the macroeconomy," Economic Theory, 63(3), 653-686
DOI 10.1007/s00199-016-0951-x
Mathematica files containing the proofs for Lemma 1 and Lemma 2; Files to replicate key results for the Lucas monetary model and the Fisherian model.
Working paper version available here.
Grants
ARC Discover Project 210101204, "Economic Policy when Interest Rates are Zero," $329,706
Joint with Bruce Preston (UNSW Sydney) and Stefano Eusepi (Brown University)
Working Papers
Monetary policy as insurance - with Stefano Eusepi (UT Austin) and Bruce Preston (UNSW Sydney)
This is new draft (January 2026). Two previous versions have circulated under the title Monetary Policy Trade-offs at the Zero Lower Bound" and "Forward Guidance with Unanchored Expectations." Technical Appendix
Abstract: We study zero interest-rate policy in response to a large negative demand shock of uncertain duration. When individuals must learn over time about the general equilibrium effects of forward guidance policy the optimal policy features an important insurance principle: the central bank makes large front-loaded promises to stabilize expectations. Because of this, the optimal policy will appear ``too stimulatory" in the event the shock turns out to be transitory---precisely because it provides insurance against the risk of a persistent shock. Optimal state-contingent policy is well-approximated by calendar-based forward guidance.
Boundedly rational expectations and the optimality of flexible average inflation targeting - with Anthony Brassil (RBA) and Callum Ryan (RBA)
This is a new draft (February 2026) Technical Appendix
Abstract: Expectations play a central role in the transmission of monetary policy, but how people form expectations is widely debated. We study optimal monetary policy design in a model with behavioral expectations that nests rational and adaptive learning beliefs as special cases, and approximates the aggregate implications of several bounded-rationality theories. We show that optimal policy is robustly characterized by a single policy framework across expectation theories: Flexible Average Inflation Targeting. Distinct from existing characterizations of such policies, we make precise what flexible and average mean, and how they depend on expectation formation and constraints faced by the central bank (imperfect information and the zero lower bound).
Resolving New Keynesian Puzzles - with Maria Eskelinen (Oxford) and Nigel McClung (Bank of Finland)
Abstract: New Keynesian models generate puzzles when confronted with the zero lower bound (ZLB) on nominal rates, such as the forward guidance puzzle and the paradox of flexibility. We show that these puzzles are resolved when monetary policy maintains a consistent history-dependence before, during, and after a ZLB episode. History dependent policy is both welfare-maximizing in theoretical models and an empirically supported description of real-world monetary policy. We show how to write monetary policy rules that preserve the same history dependence and policy objectives with and without the ZLB to resolve the puzzles in any New Keynesian model.
Expectations and the Empirical Fit of DSGE Models - with Eric Gaus (Haverford College) - (2020)
Abstract: This paper studies the improvement in empirical fit of dynamic stochastic general equilibrium (DSGE) models that assume adaptive learning in lieu of rational expectations (RE). The literature finds that estimated DSGE models with adaptive learning generate near universal improvements in fit, while inference on structural parameters is mostly unchanged. Improvements are attributed to the increased persistence generated by backward-looking expectations. We show, however, that improvements often result from altered cross-equation restrictions and not additional persistence assumptions. Nested comparisons of Euler-equation and infinite-horizon adaptive learning both significantly improve upon RE but only the latter's improvements are due to expectation formation. Bounded rationality assumptions offer an intuitive way to improve both in-sample and out-of-sample DSGE model fit. But our results suggest that learning models best-capture persistent deviation in beliefs from fundamentals rather than temporary deviations at business cycle frequencies.
Strongly Rational Routes to Randomness - (2016)
Abstract: Many behavioral models of expectation formation in macroeconomics and finance assume agents choose from a menu of predictor rules over time to construct forecasts. The menus often include a costly rational predictor that yields a correct prediction taking into account the heterogeneity of expectations. In this paper, I study the eductive justification of this rational predictor in the sense of Guesnerie (2002). I show that the condition for eductive stability is strictly weaker than in the homogeneous expectations case under commonly held assumptions. This implies that many rational routes to randomness identified by Brock and Hommes (1997) are actually strongly rational and that rational forecasting behavior is not necessarily ruled out when eductive stability in the homogeneous expectations case fails. The latter has implications for when rational behavior may occur in laboratory experiments on expectations.
Work in Progress
"Do low interest rates predict financial crises?'' - with Tristan Truuvert (University of Sydney)
Book Reviews
Gibbs, C. G. (2022) Fully Grown: Why a Stagnant Economy is a Sign of Success, by Dietrich Vollrath, Economic Record, v. 98, no. 322, 322-324
Conference Presentations
Melbourne Institute Macroeconomic Policy Workshop - Melbourne (2025)
e61 and UNSW Macroeconomic Policy Workshop - Sydney (2025)
Australian Conference of Economists - Sydney (2025)
Reserve Bank of Australia Quantitative Macroeconomics Workshop - Sydney (2024)
Expectations in Dynamic Macroeconomic Models Conference - Adelaide (2024)
Workshop of the Sydney Macro Reading Group - UNSW Sydney (2024)
NBER Summer Institute: Methods and Applications for Dynamic Equilibrium Models Program - Boston (2024)
Workshop of the Sydney Macro Reading Group - Reserve Bank of Australia (2024)
Ozmac - Monash University (2023)
Econometric Society Australasian Meetings - UNSW Sydney (2023)
Virtual Australian Macroeconomics Seminar Workshop (in person) - University of Sydney (2022)
Workshop of Australasian Macroeconomic Society - University of Sydney (2022)
Continuing Education in Macroeconomics Workshop - Monash University (2022)
Barcelona Summer Forum: Expectations in Dynamic Macroeconomic Models Conference (2022)
Expectations in Dynamic Macroeconomic Models Conference - Czech National Bank (2021)
Workshop of the Sydney Macro Reading Group - Reserve Bank of Australia (2019)
Symposium of the Society for Nonlinear Dynamics and Econometrics - FRB Dallas, USA (2019)
Expectations in Dynamic Macroeconomic Models Conference - University of Birmingham (2018)
Symposium of the Society for Nonlinear Dynamics and Econometrics - Tokyo, Japan (2018)
WEAI Conference - San Diego, CA (2017)
Symposium of the Society for Nonlinear Dynamics and Econometrics - Paris, France (2017)
Workshop of the Sydney Macro Reading Group - University of Sydney (2016)
Workshop of the Australasian Macroeconomic Society - UNSW Australia (2015)
Expectations in Dynamic Macroeconomic Models Conference - University of Oregon (2015)
Continuing Education in Macroeconomics - University of Tasmania (2014)
Symposium of the Society for Nonlinear Dynamics and Econometrics - NY, NY (2014)
Continuing Education in Macroeconomics - UNSW, Sydney NSW (2013)
Expectations in Dynamic Macroeconomic Models Conference - Federal Reserve Bank of San Francisco (2013)
Canadian Economic Association Meetings - HEC Montreal (2013)
32th Annual International Symposium on Forecasting - Boston, MA (2012)
Served as Referee for
Journal of Political Economy
Econometrica
Review of Economic Studies
American Economic Journal: Macroeconomics
Journal of Monetary Economics
Review of Economics and Statistics
Review of Economic Dynamics
European Economic Review
Journal of Banking & Finance
Journal of International Money and Finance
Journal of Money Credit & Banking
Journal of Economic Behavior and Organization
Macroeconomic Dynamics
International Journal of Central Banking
Journal of Economic Dynamics and Control
Economic Inquiry
Studies in Nonlinear Dynamics and Econometrics
Journal of Macroeconomics
Journal of Economic Surveys
Economic Record
