Loughlan O'Doherty

Loughlan O'Doherty

Job Market Candidate

Department of Economics

Connect with me

Languages
English
Key Expertise
Macroeconomics

About me

Loughlan is a PhD candidate in the Department of Economics. He specialises in macroeconomics, focusing on household heterogeneity, expectations, and business-cycle dynamics. More broadly, his research explores differences in consumer expectations and behaviour across groups, examining how these variations affect welfare and influence broader macroeconomic outcomes. 

His job market paper uses household expectations data to show that households, particularly those with lower incomes, tend to form pessimistic expectations, while richer households are generally less pessimistic.

Contact Information

Email
l.odoherty@lse.ac.uk

Office Address
Department of Economics
London School of Economics and Political Science
Houghton Street, London WC2A 2AE

Contacts and Referees

Placement Officer
Matthias Doepke

Supervisors
Ricardo Reis
Silvana Tenreyro

References
Ricardo Reis
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
r.a.reis@lse.ac.uk

Ben Moll
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
b.moll@lse.ac.uk

Silvana Tenreyro
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
s.tenreyro@lse.ac.uk

Maarten De Ridder
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
m.c.de-ridder@lse.ac.uk

Download CV

Job Market Paper

A Dollar a Day Keeps the Pessimism Away: Ambiguity, Expectations and the Income Distribution.

This paper presents three key findings from consumer survey data. First, it provides evidence of systematic forecasting errors across a range of economic outcomes. These errors suggest that households tend to form pessimistic expectations, which increase as household income decreases. Second, expectations react asymmetrically to news, particularly among lower-income households. Third, consumer sentiment is shown to account for cross-sectional differences in expectations, and this too is strongly related to income. The paper links these patterns to ambiguity aversion, suggesting that lower-income households behave as though more ambiguity-averse. To explain these findings, the paper proposes a theory of expectation formation in which agents incur costs to learn about the informativeness of ambiguous news. The model predicts that large shocks can lead to persistent pessimism, creating the potential for poverty-pessimism cycles. When calibrated to the US economy, the model shows that unexpected inflation shocks have significant long-term welfare effects, larger than those predicted by standard models. A simple transfer policy, tested in the context of the 2021-2022 inflationary episode, is found to mitigate these effects at a relatively low cost. I Link to paper.

Publications and Research

Works in Progress

Lifetime Welfare and Price Changes

Inequality Deflators