Professor Prasanna Sudhir Gai

DPhil, MPhil, BEc (Hons)

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Head of Department


Prasanna Gai is Professor of Macroeconomics at the University of Auckland.  His work applies ideas from network and game theory to understand the causes and consequences of financial crises.  He is the author of Systemic Risk - the Dynamics of Modern Financial Systems (Oxford University Press, 2013) and Private Sector Involvement and International Financial Crises (with M. Chui, Oxford University Press, 2005).

Professor Gai is currently serving a four-year term on the Advisory Scientific Committee of the European Systemic Risk Board (ESRB).  He was elected a Visiting Fellow of All Souls College, University of Oxford for the 2014-15 academic year, and was Special Adviser to Governor Mark Carney at the Bank of Canada between 2010-11.

Prior to his appointment at the University of Auckland, Profesor Gai was Professor of Economics at the Australian National University (2008-10).  He was Senior Adviser at the Bank of England from 1994-2007, heading up its financial stability research between 2003-2007 and serving as editor of its Financial Stability Report.  Whilst at the Bank of England and the Bank of Canada, Professor Gai spear-headed development of RAMSI and MFRAF, the top-down bank stress-testing models currently used by both institutions.  He was also invited by Governor Allan Bollard to conduct a formal review of the monetary policy process at the Reserve Bank of New Zealand in 2011.  

Professor Gai has been Visiting Fellow at the Isaac Newton Institute for Mathematical Sciences, University of Cambridge (2014-15), Academic Fellow of the Reserve Bank of New Zealand (2012), Visiting Research Adviser to the Monetary Authority of Singapore (2015-16), Visiting Fellow of the Hong Kong Institute of Monetary Research, and Visiting Senior Fellow at the Institute for New Economic Thinking (INET@Oxford).  He is also a Senior Research Associate with the Risk Management Institute, National University of Singapore, and the Centre for Applied Macroeconomic Analysis, Australian National University. 

Research | Current

Current research interests include:

  1. The design of macro-prudential policy
  2. Sovereign risk
  3. Information acquisition in OTC markets
  4. Law and finance
  5. Network models and financial stability


Teaching | Current

  • Econ 711    Advanced Macroeconomics (2016/17)
  • Econ 712    Topics in Macroeconomics (2017)
  • Econ 351    Financial Economics (2016/17)

Postgraduate supervision

I welcome enquiries from suitably qualified candidates interested in working in (and around) my areas of current interest.


  • Member, Advisory Scientific Committee, European Systemic Risk Board (2016-19)
  • Visiting Fellow, All Souls College, Oxford (2014-2015)
  • Academic Fellow of the Reserve Bank of New Zealand (2011-2012)
  • Special Adviser to the Governor of the Bank of Canada (2010-2011)

Areas of expertise

  • Financial Crises and Systemic Risk, Monetary Policy, International Macroeconomics, Banking

Selected publications and creative works (Research Outputs)

As of 29 October 2020 there will be no automatic updating of 'selected publications and creative works' from Research Outputs. Please continue to keep your Research Outputs profile up to date.
  • Gai, P., Lou, E., & Wu, S. X. (2020). Targeted disclosure and monetary policy flexibility: A simple model. Economics Letters, 194.10.1016/j.econlet.2020.109371
  • Davies, C., & Gai, P. (2020). The New Zealand financial cycle 1968–2017. New Zealand Economic Papers, 54 (1), 1-15. 10.1080/00779954.2018.1552984
  • Gai, P., & Kapadia, S. (2019). Networks and systemic risk in the financial system. Oxford Review of Economic Policy, 35 (4), 586-613. 10.1093/oxrep/grz023
  • Ahnert, T., Anand, K., Gai, P., Chapman, J., & Strahan, P. (2019). Asset encumbrance, bank funding, and fragility. Review of Financial Studies, 32 (6), 2422-2455. 10.1093/rfs/hhy107
  • Anand, K., & Gai, P. (2019). The safe asset frontier. New Zealand Economic Papers10.1080/00779954.2019.1688469
  • Gai, P. (2017). The design, implementation and governance of macroprudential policy.
  • Anand, K., & Gai, P. (2017). Holdout litigation and sovereign debt enforcement. Paper presented at The Financial Intermediation Research Society: 12th Annual Conference, Hong Kong. 5 June - 7 June 2017.
  • Ahnert, T., Anand, K., Gai, P., & Chapman, J. (2017). Asset encumbrance, bank funding and fragility. Frankfurt, Germany: European Systemic Risk Board.

Contact details

Primary office location

Level 6, Room 677
New Zealand