This paper analyses the incidence and severity of sudden stops in euro area countries before and after the introduction of the ECB’s asset purchase programmes. We define sudden stops as abrupt declines in private net financial inflows, i.e. total flows adjusted for EU and IMF loans and changes in TARGET2 balances. Distinguishing between mild and severe sudden stops, we document that sudden stops were overall more frequent and more severe in euro area countries compared to other OECD economies over the period 1999–2020. On the basis of a multinomial logit model, we find that the susceptibility of euro area countries to severe sudden stops mainly reflects domestic fundamentals whereas there is no clear evidence of an adverse direct effect of being part of the euro area. On the contrary, TARGET2 appears to act as an “automatic stabiliser”, counteracting sudden stops in private financial inflows. Moreover, our econometric analysis suggests that the asset purchase programmes implemented by the ECB since 2015 have overall almost halved the risk of severe sudden stops in euro area countries. We find tentative evidence that this effect operates through confidence channels.
The bank-lending channel of macroprudential policy: evidence from cross-border bank flows (with K. Neanidis) Journal of International Economics, 2025
We study the transmission of foreign macroprudential policy to domestic bank loan issuance in emerging markets via cross-border bank flows. We use the universe of bilateral cross-border bank credit transactions to destination countries matched to the macroprudential policy stance in source countries combined with bank balance sheet data in destination markets to document that a tightening of macroprudential policy in source countries reduces the positive impact of cross-border flows on the credit supply of banks in the destination. We show that the negative spillover effect of foreign macroprudential policy is operational only for capital-based and international-exposure policy tools. We also find evidence that macroprudential regulation in source countries shifts credit demand by borrowing firms and households across banks in the destination, whereas regulation performed by destination countries does not change the inward spillovers associated with cross-border flows.
Migration and portfolio allocation across borders: the EU enlargement as a natural experiment (draft available upon request)
Despite significant reductions in barriers to capital mobility over the past four decades, investors continue to exhibit a strong preference for domestic investments, a phenomenon known as home bias. This persistent bias remains one of the central puzzles in international macroeconomics. This study examines the impact of labour mobility on international portfolio diversification in the context of the European Union's enlargements in 2004, 2007, and 2013. The identification strategy exploits cross-country and temporal variations in transitional arrangements for labour mobility between new EU member states and pre-2004 member countries. The findings reveal three key insights: First, a clear \textit{migration bias} in investment behaviour exists, with migrants increasing investments in their home countries following the loosening of mobility restrictions, driven by greater familiarity with domestic assets. Second, there is a heterogeneous effect across types of restrictions, with the bias being more pronounced after the simplification of migration procedures for highly educated workers. Finally, the migration bias diminishes over time as migrants gain greater exposure to the financial markets of their host countries.
ATLAS: An Analytical Tool for Linking and Assessing industrial ecoSystems (with S. Signorelli and G. De Prato) Publications Office of the European Union, Luxembourg, 2025
This report presents a novel, network-based approach to map the global positioning of the EU across industrial ecosystems, benchmarking against other geographic areas, in particular the United States and China. Building on the DGTES methodology, initially applied to the digital ecosystem, we extend the framework to all 14 industrial ecosystems as defined by the European New Industrial Strategy.
This work offers the first comparative, data-driven picture of the EU’s industrial landscape using a network-based approach. While not exhaustive, it offers early insights into Europe’s strengths, dependencies, and areas for strategic policy attention. It is intended as a starting point for deeper analysis, supporting the European Commission’s industrial priorities under ‘A new plan for Europe’s sustainable prosperity and competitiveness’.
Strategic Insights into the EU's Advanced Manufacturing Industry: Trends and Comparative Analysis (with J. Soguero Escuer, E. Calza, C. Dunker, and G. De Prato) Publications Office of the European Union, Luxembourg, 2024
EU Science Hub: Advanced manufacturing is key for EU competitiveness
The Advanced Manufacturing (ADMAN) study, launched in 2023, aims to support EU policymakers, industrial stakeholders, and Member States in assessing the performance of the advanced manufacturing industry in Europe and shaping EU industrial strategy. Focused on advanced technologies applied to manufacturing processes, the ADMAN study builds on the recommendations of the Industrial Forum’s Task Force on Advanced Manufacturing and aims at addressing existing data gaps by deploying a methodological approach that provides a comprehensive and comparative overview of the advanced manufacturing industry. This report describes the results of the study by DG GROW and JRC on advanced manufacturing worldwide, defining the metrics proposed to map the advanced manufacturing industry at global level as well as the main findings, with a special emphasis on the EU's position relative to global competitors. The report finds that the EU is a strong international advanced manufacturing player; however, it is increasingly under international competitive pressure. The ADMAM study includes also an online tool, allowing readers to further deep dive into the key findings of the report.
DGTES mapping of the digital ecosystem - Economic insights for EU competitiveness and economic security (with G. De Prato, E. Calza, J. Soguero Escuer, and M. Vazquez-Prada Baillet) European Commission, Ispra, 2024
This Science for Policy Brief (SfP Brief) presents the Digital Techno-Economic ecoSystem (DGTES) methodological approach developed by the Joint Research Centre (JRC) for mapping the digital ecosystem and provide original analytical insights to enhance EU competitiveness and economic security. DGTES analyses digital and industrial transformations across 15 Digital Areas (DAs) like AI, quantum technologies, and 5G. Since DGTES can serve to study different topics or critical technologies to address policy-relevant questions, this SfP Brief we apply the DGTES methodology to assess investment flows from 2009 to 2023, including EU funds and venture capital. This work underscores substantial EU investments in cloud computing, AI, 5G, and robotics, and illustrates its application with the hypothetical "Artificial EU" firm case study.