Jenny Chan

Welcome to my website!
I am a Research Advisor at the Bank of England and a member of the Centre for Macroeconomics.

I received my Ph.D. in Economics from Universitat Pompeu Fabra. You can find my CV here.

Research Interests
Macroeconomics, Monetary Policy, Information Frictions

Web
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Contact
jenny.chan[at]bankofengland[dot]co[dot]uk
Bank of England, Threadneedle Street, London EC2R 8AH

Research


Publications

Working Papers

  • Trade Fragmentation, Inflationary Pressures, and Monetary Policy
    with M. Ludovica Ambrosino and Silvana Tenreyro
    Under Review
    How does trade fragmentation affect inflationary pressures? What is the response of monetary policy needed to sustain inflation at target? We develop a two-sector, small open-economy model featuring imperfect international risk-sharing and household heterogeneity that captures both the supply-side and demand-side effects of fragmentation. The impact of fragmentation on inflationary pressures, and the appropriate policy response, depend not only on the direct effect of higher import prices on supply but, crucially, on how aggregate demand adjusts in response to lower real incomes and productivity. In turn, this depends on the pace of fragmentation (whether it is gradual or front-loaded), as well as several other structural factors elucidated by the model analysis. We compare the outcomes resulting from a central bank following Taylor-type monetary policy rules to a constrained-efficient allocation.
  • Sticky Production and Monetary Policy
    with Sebastian Diz and Derrick Kanngiesser
    We study a New Keynesian model where production inputs and pricing decisions are made under information frictions. Firm production is constrained by inputs that are chosen before shocks are realized, based on firms’ expectations of future demand. We show that the assumption of real rigidities versus nominal rigidities is not innocuous, as assuming the presence of either or both affects the passthrough of demand shocks to aggregate output and inflation. When the choice of production inputs is made under imperfect information about demand shocks, the impact on inflation is amplified while the impact on output is dampened. When both production inputs and pricing decisions are made under imperfect information about demand shocks, the pass-through to output is amplified while the impact on inflation is dampened. Additionally, we show that expectations about demand can behave similarly to a supply shock, as these expectations influence the natural level of output and enter the New Keynesian Phillips curve in a manner analogous to a cost-push shock. Empirical evidence suggests that inflation falls following a positive surprise in industrial production, consistent with the model version featuring real rigidities.
  • Conquering Distance? Geographical Isolation and Spatial Development
    with Sebastian Ellingsen (draft available upon request)
    What is the effect of past market access on spatial development? We study this question by constructing a granular measure of pre-industrial geographical isolation. Despite significant reductions in transportation costs over time, we find that a location’s historical isolation has a persistent effect on its modern spatial development. Specifically, we show that isolated locations were less likely to sustain cities between 1200 and 1800, with a lower GDP per capita between 1900 and 2015. A quantitative spatial model provides a structural interpretation of these findings. Through the lens of the model, we assess the relative importance of different channels of persistence. Both first and second-nature fundamentals are important drivers of the persistent impact of historical geographical isolation. Our results suggest that infrastructure investment undertaken at stages of development when the distribution of economic activity is malleable can have long-run implications.

Work in Progress

  • Transportation Networks and Structural Transformation in Regions
    with Sebastian Ellingsen (draft available upon request)
    Since 1900, rural regions in Europe experienced more rapid income growth and rapid industrialization than urban regions. Did lower transportation costs enable this rural catchup? We explore this question using historical data from Norway and European regions since 1900. In both cases, we find that improvements in market access accelerated structural transformation out of agriculture in regions that were initially specialized in agriculture. To interpret this pattern, we build a multi-sector dynamic spatial model equilibrium of structural transformation that we take to the data. Through counterfactuals exercises, we find that lower transportation costs accelerated structural transformation in rural locations, but are insufficient to account for the full catchup observed in the data. Our findings suggest alternative mechanisms are important in accounting for rural catchup across European regions.

Policy Writing


Decompositions, forecasts and scenarios from an estimated DSGE model for the UK economy
Bank of England Macro Technical Paper, No. 1, June 2025
with Daniel Albuquerque, Derrick Kanngiesser, David Latto, Simon Lloyd, Sumer Singh, and Jan Žáček

Some Implications of Climate Policy for Monetary Policy
Bank Underground, November 2024
with Francesca Diluiso and Boromeus Wanengkirtyo

Monetary Policy in a Gas-TANK
Bank Underground, August 2024
with Sebastian Diz and Derrick Kanngiesser

Discussions


Carbon Pricing and Firms' Expectations: Evidence from Italy
by Giacomo Mangiante
slides

Optimal Monetary Policy during a Cost-of Living Crisis
by Alan Olivi, Vincent Sterk, and Dajana Xhani
slides

The Aggregate and Distributional Effects of a Carbon Tax
by Christian Proebsting
slides

Pass-Through of Cost-Push Shocks
by Isabel Gödl-Hanisch and Manuel Menkhoff
slides

Looking Through Supply Shocks versus Controlling Inflation Expectations: Understanding the Central Bank Dilemma
by Paul Beaudry, Thomas J. Carter, and Amartya Lahiri
slides

Experience-Based Heterogeneity in Expectations and Monetary Policy
by Lucas Radke and Florian Wicknig
slides

Hitting the Elusive Inflation Target
by Francesco Bianchi, Leonardo Melosi, and Mattias Rottner
slides

This website is used to disseminate my work and the views expressed here do not represent those of the Bank of England or any of its policy committees.