Max Croce, All the Ways to Say Long Term Economic Growth

IN ORDER TO ANALYZE AND UNDERSTAND GROWTH, MAX CROCE, FULL PROFESSOR AT THE DEPARTMENT OF FINANCE, STUDIES EXCHANGE RATES, HUMAN CAPITAL, AND INVESTMENTS

Exchange rates were considered to be enigmatic mechanisms when Max Croce enrolled in Economics at Bocconi University, in 1997. «No other financial index was surrounded by so much mystery. They could not be explained, or so they said». Professor Croce has devoted part of his research career to prove this idea wrong. He did so at the Kenan-Flagler Business School at the University of North Carolina and from now on will do so at Bocconi’s Department of Finance as a Full Professor. In Milan, he will also research on human capital, student debt and other issues that share the same common thread: long-term economic growth.
 
Mariano Massimiliano Croce was born in 1978 in Pantelleria, a small island in the Mediterranean Sea between Sicily and Tunisia. He completed his studies in Economics at the time of the euro transition. The event prompted him to develop an interest in international economics and exchange rate theory. After graduating from Bocconi, he applied for a PhD in Economics at the New York University. There he met his main advisor and future Nobel Prize winner Thomas J. Sargent. «I was on the verge of quitting the program», Croce recalls. «Thomas reignited my love for research and helped me to overcome the third-year crisis, when PhD students must become fully independent».
 
Max Croce stayed at Kenan-Flagler for eleven years. There he fine-tuned his research on exchange rates and international economics with his main co-author Riccardo Colacito. «Some literature considered rates disconnected from macroeconomic variables. We have shown that, on the contrary, they have a lot to do with long-term growth expectations». Two years at Wharton, a semester at Stern-NYU and the time spent working on research projects on fiscal policy and intangible capital with the faculty of Duke’s Fuqua School of Business were equally important for Professor Croce.
 
In another strand of research, Max Croce studies stock markets in the context of macroeconomics and investments. «In a forthcoming paper titled BKK the EZ Way, for instance, we put long-run growth in relation to exchange rates and investments among G7 countries». Professor Croce’s agenda at Bocconi will also include studies on American student debt, which just hit $1.5 trillion. «I want to understand how the effectiveness of investment in human capital can be enhanced and how it interacts with firm activities and long-term growth».
 
In addition to his assignment in the PhD program, Max Croce will teach at SDA Bocconi Asia Center in Mumbai, India, a country that he has been visiting regularly for seven years now. During his stay in the US, he coached a youth soccer team, the sport practiced by his son. «He is 8 years old and is particularly happy moving to Milan. Even though I root for Juventus» he adds smilingly, «he was admitted to the academy of Inter football club».
 
 
Find out more
 
Colacito, Croce, Risks for the Long Run and the Real Exchange Rate, Journal of Political Economy 2011, Volume 119 (1).
 
Croce, Long-Run Productivity Risk. A New Hope for Production-Based Asset Pricing?, Journal of Monetary Economics 2014, Volume 66.
 
Ai, Croce, Diercks. Li, News Shocks and Production-Based Term Structure of Equity Returns, Review of Financial Studies, 2018, Leading Article (Editor’s Choice), Volume 31(7).
 
Colacito, Croce, Ho, Howard, BKK the EZ Way. International Long-Run Growth News and Capital Flows, American Economic Review, forthcoming.

by Claudio Todesco