I am a Professor of Economics at BI Norwegian Business School. I hold a Ph.D in Economics from the London School of Economics, where I also was employed as Lecturer. In the academic year 2004-2005 I was visiting professor at Northwestern University. From 2011-2016 I was non-voting member of the board of Norges Bank, which is also the board of the Government pension fund (NBIM).
My area of research is mostly within economic theory, with applications mainly to labor economics and industrial organization. I have also done empirical works within labor economics. I have published in leading journals like the Journal of Political Economy, the Review of Economic Studies, and American Economic Review. I am Research Fellow at the CEPR (Center for Economic Policy Research), and Fellow of the European Economic Association. In 2011 I was Scientific Chairman for the EEA annual congress in Oslo. I am also associated editor (previously editor) of the Scandinavian Journal of Economics and partner in the consulting firm Oeconomica.
I have undertaken projects within several different industries, including telecommunication, agriculture, energy and housing. I have testified in court as an expert witness on a number of occasions, for the Supreme court in 2014.
Research areas
My research interests can broadly be categorized as follows:
Economic theory:
* Competitive markets (general equilibrium) with search frictions. With applications to equilibrium unemployment theory and the theory of human capital.
* Labor contracts in general equilibrium. With applications to macroeconomics (explaining fluctuations), equilibrium unemployment, industry structure and public economics.
*Topics in industrial economics and political economy: Regulation, Anti-trust, Network externalities, ownership structure, and voter behavior.
Applied economics:
*Competition policy and regulation. I have analyzed a large number of industries in Norway: the telecommunication industry, electricity production and distribution, the dairy industry, the publishing industry, public housing etc.
*Economic (litigation) consulting. I have broad experience from a number of cases at all levels of the Norwegian court system.
* Macroeconomic analysis.
* Optimal ownership structure.
* Long-term public finance (advisor to the Treasury spring 2004).
Teaching areas:
As department chair I have limited teaching responsibilities, but I am responsible for DRE 7005 Topics in Search Theory.
Several externalities arise when agents shield optimally to avoid infection during an epidemic. We classify externalities into static and dynamic and compare the decentralized and optimal solutions when agents derive utility from social interaction. For low infection costs agents shield too little; for high costs they shield too much because of a “rat race to shield”: they delay social action until other agents contract the disease and society reaches herd immunity. Other externalities drive more wedges between the private and social outcomes. The expectation of a fully effective vaccine that ends the disease faster changes results, reversing excessive shielding.
In the Varian (1980; American Economic Review 70(4) (1980), 651–59) model of price competition, a change from simultaneous to sequential price setting dramatically changes equilibrium strategies, and in the unique symmetric, equilibrium prices are pushed up to the monopoly price. There also exists an asymmetric equilibrium with lower average prices. Our main contribution is to test these predictions in the laboratory. Our data strongly support the qualitative model predictions. However, a fraction of players set low prices in accordance with the asymmetric equilibrium, which is puzzling. We show that the puzzle to a large extent can be resolved by introducing competitive preferences in the model.
Garibaldi, Pietro; Moen, Espen Rasmus & Pissarides, Christopher A. (2023)
We discuss the connections between epidemiology models and the search and matching (SAM) approach and draw conclusions about modeling the trade-offs between lockdowns and disease spread. We review the pre-COVID epidemics literature, which was mainly by epidemiologists, and the post-COVID surge in economics papers that use meeting technologies to model the trade-offs. We argue that modeling the decentralized equilibrium with economic trade-offs gives rise to substantially different results from the earlier epidemics literature, but policy action is still welfare-improving because of several externalities.
Boeri, Tito; Garibaldi, Pietro & Moen, Espen Rasmus (2022)
In medio stat victus Labor Demand Effects of an Increase in the Retirement Age
After falling for four decades, statutory retirement ages are increasing in most OECD countries. The labor market adjustment to these reforms has not yet been thoroughly investigated by the literature. We draw on a major pension reform that took place in Italy in December 2011 that increased the retirement age by up to six years for some categories of workers. We have access to a unique dataset validated by the Italian social security administration (INPS), which identifies in each private firm, based on an administrative exam of eligibility conditions, how many workers were locked in by the sudden increase in the retirement age, and for how long. We find that firms mostly affected by the lock in are those that were downsizing even before the policy shock. The increase in the retirement age seems to displace more middle-aged workers than young workers. Furthermore, there is not a one-to-one increase in the number of older workers in the firms where some workers were locked in by the reform. We provide tentative explanations for these results, based on the interaction between retirement, employment protection legislation and liquidity constraints of firms.
Housing transactions by moving homeowners take two steps—buying a new house and selling the old one. This paper argues that the transaction sequence decisions of moving homeowners have important effects on the housing market. Moving homeowners prefer to buy first whenever there are more buyers than sellers in the market. However, this congests the buyer side of the market and increases the buyer–seller ratio, further strengthening the incentives of other moving owners to buy first. This endogenous strategic complementarity leads to multiple steady state equilibria and large fluctuations, which are broadly consistent with stylized facts about the housing cycle.
Gabrielsen, Tommy Staahl; Moen, Espen Rasmus & Nilssen, Tore (2020)
Partner selection is a vital feature of human behavior with important consequences for individuals, families, and society. We use the term hypergamy to describe a phenomenon whereby there is a tendency for husbands to be of higher rank within the male earnings capacity distribution than their wives are within the female distribution. Such patterns are difficult to verify empirically because earnings are both a cause and an effect of the mating process. Using parental earnings rank as a predetermined measure of earnings capacity to solve the simultaneity problem, we show that hypergamy is an important feature of today’s mating patterns in one of the most gender-equal societies in the world, namely Norway. Through its influence on household specialization, we argue that hypergamy may explain parts of the remaining gender wage gap.
Moen, Espen Rasmus; Wulfsberg, Fredrik & Aas, Øyvind Nilsen (2019)
In this paper, we study price dispersion in the Norwegian retail market for 766 products across 4,297 stores over 60 months. Price dispersion for homogeneous products is significant and persistent, with a coefficient of variation of 37 percent for the median product. Price dispersion differs between product categories and over time. Store heterogeneity accounts for 30 percent of the observed variation in prices for the median product–month, and for around 50 percent for the sample as a whole. Price dispersion is still prevalent after correcting for store heterogeneity.
Boeri, Tito; Garibaldi, Pietro & Moen, Espen Rasmus (2018)
Financial constraints in search equilibrium: Mortensen Pissarides meet Holmstrom and Tirole
A key lesson from the Great Recession is that firms’ leverage and access to finance are important for hiring and firing decisions. It is now empirically established that bank lending is correlated with employment losses when credit conditions deteriorate. We provide further evidence of this and make causal inferences on the effect of leverage on job losses drawing on a new firm-level dataset that we assembled on employment and financial positions of European firms. Yet, in the Diamond Mortensen Pissarides (DMP) model there is no role for finance. All projects that display positive net present values are realized and financial markets are assumed to be perfect. What if financial markets are not perfect? Does a different access to finance influence the firm’s hiring and firing decisions? The paper uses the concept of limited pledgeability proposed by Holmstrom and Tirole to integrate financial imperfections and labor market imperfections. A negative shock wipes out the firm’s physical capital and leads to job destruction unless internal cash was accumulated by firms. If firms hold liquid assets they may thus protect their search capital, defined as the cost of attracting and hiring workers. The paper explores the trade-off between size and precautionary cash holdings in both partial and general equilibrium. We find that if labor market frictions disappear, so does the motive for firms to hold liquidity. This suggests a fundamental complementarity between labor market frictions and holding of liquid assets by firms.
Moen, Espen Rasmus & Riis, Christian (2017)
Regulating the Norwegian Telecommunications Market in 2016: How Much is Necessary?
Bjørndal, Mette Helene; Gjesdal, Frøystein & Mjøs, Aksel (red.). Finance in Society: An Anthology in Honour of Thore Johnsen
Boeri, Tito; Garibaldi, Pietro & Moen, Espen Rasmus (2017)
All OECD countries have either legally mandated severance pay or compensations imposed by industry-level bargaining in case of employer initiated job separations. The paper shows that mandatory severance is optimal in presence of wage deferrals induced by workers' moral hazard. We also establish a link between optimal severance and efficiency of the legal system and characterize the effects of shifting the burden of proof from the employer to the worker. Quantitatively, the welfare effects of suboptimal severance payments vary in general equilibrium between 1 and 3 %. The model accounts also for two neglected features of the legislation. The first is the discretion of judges in declaring the nature, economic vs. disciplinary, of the layoff. The second feature regards the relationship between severance and tenure. Our theory gives necessary conditions under which optimal severance is increasing with tenure, as generally observed.
Helland, Leif; Moen, Espen Rasmus & Preugschat, Edgar (2017)
Information and coordination frictions in experimental posted offer markets
This paper proposes an explicit model of spillovers through labor flows in a framework with search frictions. Firms can choose to innovate or to imitate by hiring a worker from a firm that has already innovated. We show that if innovating firms can commit to long-term wage contracts with their workers, productivity spillovers are fully internalized. If firms cannot commit to long-term wage contracts, there is too little innovation and too much imitation in equilibrium. Our model is tractable and allows us to analyze welfare effects of various policies in the limited commitment case. We find that subsidizing innovation and taxing imitation improves welfare. Moreover, allowing innovating firms to charge different forms of fees or rent out workers to imitating firms may also improve welfare. By contrast, non-pecuniary measures that reduce the efficiency of the search process, always reduce welfare.
We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker–firm–owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also employment in partly self-owned limited liability companies. Based on this extended entrepreneurship concept, we find that entrepreneurship tends to be profitable. It also raises income variability, but the most successful quartile gains much more than the least successful quartile loses. Key determinants of the decision to become an entrepreneur are occupational qualifications, family resources, gender, and work environments. Individual unemployment encourages, while aggregate unemployment discourages, entrepreneurship.
Equilibrium incentive contracts and efficiency wages
Journal of the European Economic Association, 4, s. 1165- 1192.
We analyze the optimal (efficiency) wage contract when output is contractible but firms neither observe the workers' effort nor their match-specific productivity. Firms offer wage contracts that optimally trade off effort and wage costs. As a result, employed workers enjoy rents, which in turn creates unemployment. Nonetheless, the incentive power of the equilibrium wage contract is constrained efficient in the absence of taxes and unemployment benefits. We also show that more high-powered incentive contracts tend to be associated with higher equilibrium unemployment rates.
Fjeldstad, Øystein; Moen, Espen R. & Riis, Christian (2006)
Regulation and competition in the Norwegian telecommunication market
Competition and Welfare: The Norwegian Experience, Lars Sørgaard (ed)
Dalen, Dag Morten; Moen, Espen R. & Riis, Christian (2006)
Contract renewal and incentives in public procurement
International Journal of Industrial Organization, 24(2), s. 269- 285.
This paper explores how the government's choice of renewal policy in public procurement programs can be used as a mechanism to provide firms with incentives to supply quality. A public service is produced by several firms. The firms participate in a tournament where they are ranked according to the quality of their services, and rewarded in terms of contract renewals. We analyse the firms' incentives to produce high-quality services, and find that they are maximised if 50% of the contracts are renewed. The optimal renewal policy trades off incentive provision (which requires that a relatively large fraction of the firms are replaced each period) against the entry costs of new firms. (c) 2005 Elsevier B.V. All rights reserved.
Moen, Espen R. & Rosen, Åsa (2005)
Performance pay and adverse selection
The Scandinavian Journal of Economics, 107(2), s. 279- 298.
It is well known in personnel economics that firms may improve the quality of their workforce by offering performance pay. We analyze an equilibrium model where worker productivity is private information and show that the firms' gain from worker self-selection may not be matched by a corresponding social gain. In particular, the equilibrium incentive contracts are excessively high-powered, thereby inducing the more productive workers to exert too much effort and increasing agency costs stemming from the misallocation of effort.
Moen, Espen R. & Rosen, Åsa (2004)
Does Poaching Distort Training
?, 71(4), s. 1143- 1162.
Moen, Espen R. (2003)
Do Good Workers Hurt Bad Workers-or is it the Other Way Around?
International Economic Review, 44, s. 779- 799.
Dalen, Dag Morten; Fehr, Nils-H. M. Von der & Moen, Espen R. (2003)
Regulation with Wage Bargaining
Economic Journal, 113(487), s. 525- 538.
Golombek, Rolf & Moen, Espen R. (2002)
Do negotiated agreements lead to cost efficiency
Journal of Economics, 76(2)
Moen, Espen R. (2001)
Hva skal vi gjøre med SDØE?
Økonomisk forum, 55(5), s. 29- 34.
Dalen, Dag Morten; Moen, Espen R. & Riis, Christian (2001)
Public Ownership as a Signalling Device
Nordic Journal of Political Economy, 27(1), s. 3- 12.
Golombek, Rolf & Moen, Espen (1999)
Er frivillige avtaler kostnadseffektive?
Sosialøkonomen
Moen, Espen (1999)
Education, Ranking, and Competition for Jobs
Journal of Labor Economics, vol 17, s. 694- 723.
Isachsen, Arne Jon & Moen, Espen (1999)
Er eurotilknytning så ille? Tiden baner veien for euro i Norge
Sosialøkonomen
Moen, Espen R. & Riis, Christian (1998)
Investeringer i kunnskap
Markeder, ressurser og fordeling
Moen, Espen R. (1998)
Efficient Ways to Finance Human Capital Investments
Economica, 65, s. 491- 505.
Gabrielsen, Tommy Staahl; Moen, Espen Rasmus & Nilssen, Tore (2022)
Bjerkholt og enkle svar om dagligvareprisene
Dagens næringsliv [Kronikk]
Gabrielsen, Tommy Staahl; Moen, Espen Rasmus & Nilssen, Tore (2020)
Påbud om like innkjøpspriser kan gi dyrere dagligvarer
Dagens næringsliv [Kronikk]
Riis, Christian & Moen, Espen Rasmus (2017)
Skattelette? Hvilken skattelette?
Dagens næringsliv [Kronikk]
Moen, Espen Rasmus & Torvik, Ragnar (2017)
Oljefondet ut av oljeaksjer
Dagens næringsliv [Kronikk]
Gabrielsen, Tommy Staahl & Moen, Espen Rasmus (2017)
Deling åpner for ny verdiskapning
Dagens næringsliv [Kronikk]
Bjørnland, Hilde C & Moen, Espen R (2011)
Oljens Ringvirkninger
Dagens næringsliv [Kronikk]
Holden, Steinar & Moen, Espen R (2009)
Se opp for likviditetsfellen!
Dagens næringsliv [Kronikk]
Moen, Espen Rasmus & Riis, Christian (1)
Husholdningene bør få strømstøtte
Dagens næringsliv [Kronikk]
Moen, Espen Rasmus & Nenov, Plamen (1)
Kjøpe først eller selge først i boligmarkedet?
Dagens næringsliv [Kronikk]
Heggedal, Tom-Reiel; Moen, Espen Rasmus & Riis, Christian (2015)
Agglomerasjonsmodell
[Report]. BI CENTER FOR RESEARCH IN ECONOMICS AND MANAGEMENT.