Arguably, modern capitalist economies that operate in a zero-low-bound economic environment should try and generate credit bubbles in order to avoid slipping towards low inflation or even deflation. The theory of secular stagnation is based on the idea that economies are now trapped in a zero-bound interest rate environment where the marginal efficiency of capital is also at zero. The policy prescription would be to drive interest rates (real or nominal) to negative digits in order to stimulate ‘animal spirits’ or ‘bubbles’ which in turn will rejuvenate stagnating economies. This is a very topical and challenging theme amongst policy makers as many policy attempts, mainly through quantitative easing, to revive economic activity have turned out to be ineffectual. The prospective candidate will be presented with a unique opportunity to conduct an exploratory investigation into the theoretical and empirical aspects of the topic at hand by empirically testing the validity of such as theoretical statement. Additional aspects pertaining to the consequences of the zero-low-bound environment are also expected to be investigated.

Supervisors: Professor Constantinos Alexiou and Dr Nemanja Radic 

Application details: The PhD candidate should hold a minimum 2.1 class undergraduate degree in economics, finance or related discipline and have passed, or expect to have passed by autumn, a Master’s degree or equivalent research experience in a work setting. See Admission Requirements for English language requirements.

Deadline: Expressions of interest alongside a CV are invited via email to and