Philip Barrett

About Me

I am an Economist at the International Monetary Fund, working in the Fiscal Affairs Department. My interests are sovereign default, monetary and fiscal policies, and computational economics.


Working papers

Resolving International Macro Puzzles with Imperfect Risk Sharing and Global Solution Methods (With Jonathan Adams) Latest version: March 2017

Do gross international asset positions matter for macroeconomic outcomes? In this paper, we argue that they do. In particular, we demonstrate that asset market incompleteness which features a meaningful portfolio choice can resolve the Backus-Smith puzzle: that relative consumptions and real exchange rates are negatively correlated. Because income and nominal exchange rates are positively correlated, countries choose a portfolio that features home bias in bond holdings, which is common in the data. We compare our findings to the predictions of alternative asset market structures frequently used in the literature - such as complete markets or restricting assets to a single bond - and show that they cannot solve the Backus-Smith puzzle without further frictions. We also show that local perturbation methods that use endogenous discount factors to stabilize the model are inaccurate, even when they correctly characterize the average portfolio holdings. Instead, we use a novel global solution method to accurately solve the portfolio problem when asset markets are incomplete, using an approach that generalizes Maliar and Maliar (2015) to solve a wide class of models.

Work in progress

Optimal dissolution of fiscal unions

In this paper I investigate how the rules for disolving fiscal unions affect their desireability. The key trade off is between desireability and sustainability of the union. By detering break ups, dissolution rules which attribute a greater share of the union's debt to countries which initiate the breakup lead to a union which is sustainable (incentive compatible) following a greater range of shocks. But because the same rule also reduces the ex ante desireability of such a union, as it decreases the borrowing limit of the union and so the degree of risk sharing it provides.

Interest-growth differentials and debt limits in advanced economies

Abstract coming soon.



University of Chicago

PhD, Economics June 2016

London School of Economics & Political Science

M.Sc. Econometrics & Mathematical Economics, with Distinction June 2008

University of Oxford

M.A. Mathematics, First Class June 2005

Full CV (pdf)



A Julia package to provide basic functionality for manipulating value sets in dynamic and repeated games. Currently includes: cnoversions between point and normal-distance forms, inner & outer approximate set sums, convex hulls, convex unions, vector addition, plotting, and cropping
Links:    Tutorial    github page


This project implements the Abreu-Sannikov (2013) method for computing sets of equilibrium values in two-player games of complete information. Interface in R, underlying code in C++.
Links:    Manual    User guide    Source package    Windows binaries    github page


R package to provide easy & fast Chebychev approximation of arbitrary 1- and 2-dimensional functions. Also generates shape-preserving 1-dimensional approximations.
Links:    Manual    User guide    Source package    Windows binaries    github page


R package to provide fast and accurate linear, bilinear and trilinear interpolation. Interface in R, underlying calculation in C++.
Links:    Manual    Source package    Windows binaries    github page

Other projects (available on request)

Extends the method of Judd, Yeltekin & Conklin (2006) to compute the full set of of exquilibria of a repeated game with a payoff-relevant, exogenous, publicly observed state.
Uses a similar method of Judd, Yeltekin & Conklin to solve a discrete-signal version of the classic two-player Green-Porter with incomplete information.