Working Papers
Working Papers
How Big Is the Big Push? The Macroeconomic Effects of a Large-Scale Regional Development Program [updated version]
Co-author: F. Filippucci
From 1950 to 1992, Italy implemented one of the largest regional development programs in history to foster industrialization in its Southern regions. The program persistently boosted local economic activity but hardly reduced regional output per worker differentials. To account for the macroeconomic effects of the program, we develop a two-region growth model with public capital, factor mobility, and agglomeration economies. The welfare gains from the program outweighed its costs, although large crowding-out effects on the non-targeted regions substantially reduced its benefits. A counterfactual exercise reveals that the welfare gains would have been larger under a place-neutral allocation of resources.
Job market seminars 2024: Bank of Italy, HEC Paris, CREI, Federal Reserve Bank of Boston, Columbia, National University of Singapore (NUS)
Seminars/Conferences: Boston College Macro Seminar (September 2024), Columbia New Thinking in Industrial Policy (November 2024), NBER Summer Institute 2025 Economic Growth (forthcoming)
The Return of the Phillips Curve: Evidence from US Cities [updated version]
Co-author: G. Gitti
We test for time variation in the slope of the US Phillips curve exploiting the post-COVID inflation episode as a quasi-experimental setting. To do so, we leverage data on inflation and unemployment across US metropolitan statistical areas (MSAs) and use a two-region New-Keynesian model to derive the slope of the aggregate Phillips curve from our MSA-level estimates. We find that the slope of the Phillips curve increased substantially during the post-COVID inflation and disinflation periods, reaching its highest level since the mid-1970s. We further examine the mechanisms suggested by our model and document that a sizable estimated decrease in the elasticity of labor supply and the post-COVID increase in the frequency of price change jointly account for the Phillips curve steepening.
Previously circulated with the title: Inflation Since COVID: Demand or Supply [SSRN]
NBER Spring 2023 Monetary Economics Program Meeting, Bank of Canada-University of Toronto Inflation Workshop 2023, Norges Bank Women in Central Banking Workshop 2023, Norges Bank-Bank of Italy-Collegio Carlo Alberto Conference on Heterogeneity and Microdata 2024, European Commission (DG ECFIN) Post-COVID Labour Markets Workshop 2025.
Selected as finalist in the European Central Bank's Young Economist Prize 2023.
Media coverage: VoxEu-CEPR, New York Times
Balanced Budget Requirements and Local Austerity Multipliers
Co-authors: F. Filippucci and S. Valle
Fiscal consolidation often entails balanced budget requirements (BBRs) imposed to local governments. However, little is known about the effects of BBRs on economic activity, as most quasi-experimental estimates of local fiscal multipliers stem from windfall expansionary shocks. This paper studies the 2013 extension of a BBR to Italian municipalities below 5,000 residents. Using a two-stage least squares difference-in-discontinuities design, we document that tighter rules pushed local governments to increase their budget surplus and correspondingly reduce their borrowings by about 1\% of local income. Treated municipalities cut capital expenditures, rather than decreasing current expenditures or raising taxes. The estimated local fiscal multiplier is not statistically different from zero and significantly lower than 1.5, the prevailing estimate in the literature. The result holds even after accounting for spatial and public procurement network spillovers. Overall, our findings point to a relatively low short-term local output cost of BBRs.
Work in progress
Wages Since COVID
Co-authors: G. Gitti, D. Patki, P. Wu
The Short and Long Run of Substitution Bias in Inflation
Co-authors: D. Cai and D. Patki
Extremely Early Retirement
Co-authors: F. Filippucci, P. Garibaldi, G. Mastrobuoni