Research

Job Market paper

“Identifying Economic Shocks in a Rare Disaster Environment” (with Luisa Corrado and Stefano Grassi). CEIS Tor Vergata Research Paper Series. 19(5), n. 517. (2024). 

Previously circulated under the title "Modelling and Estimating Large Macroeconomic Shocks During the Pandemic” (NIESR and CREATES). [Revision requested]

We propose a new approach to efficiently estimate and analyze DSGE models subject to large shocks. The methodology is applied to study the macroeconomic effect of these unusual shocks in a new Two-Sector model with heterogenous exposure to the COVID-19 pandemic across sectors. We solve the model nonlinearly and propose a new nonlinear, non-Gaussian filter designed to handle large shocks and identify their source and time location. Monte Carlo experiments show that the estimation and identification of large shocks is feasible with a massively reduced running time. Empirical results indicate that the pandemic-induced economic downturn can be reconciled with a combination of large demand and supply shocks. Finally, we present a set of counterfactual experiments to filter out potential demand and supply shock complementarities, and perform a robustness exercise to check the sensitivity of the model parameters to large shocks.

Publications

“The Macroeconomic Spillovers from Space Activity” (with Luisa Corrado, Stefano Grassi e Edgar Silgado-Gómez). Proceedings of the National Academy of Sciences (PNAS), 120(43). (2023). 

The resurgence in space activities we are witnessing may provide opportunities for new technologies to generate potential spillovers to the real economy. To address this view, we propose a macroeconomic model with endogenous growth and a space sector. The model describes the relationship between space investment and technological spillovers, which support persistent economic growth. Our estimates indicate that space activities provide growth spillovers that peak from the late 1960s to the early 1980s. Recent space activities have a much lower economic impact. Finally, extensive experiments quantify the economic relevance of our results.

Working papers

"Pandemics, Energy Shocks and the Macroeconomy" (with Luisa Corrado, Stefano Grassi, and Francesco Ravazzolo) [Submitted]

This work studies the turbulent confluence of two major events - the COVID-19 pandemic and the Russian invasion of Ukraine - both of which caused significant disruptions in global energy demand and macroeconomic variables. We propose and estimate a two-sector Dynamic Stochastic General Equilibrium model that incorporates both crude and refined energy sources, thus combining together the multifaceted dynamics of the energy sector, where crude elements like oil, coal, and gas are intertwined with other production components. The model describes the transmission of energy shocks through complementarities in production and consumption, as a mechanism that amplifies the fluctuations of the business cycle. We find that the impact of price shocks on oil, coal, and gas accounts for 32% of the increase in the general price level between 2021:Q1 and 2022:Q4, and that oil and gas price shocks contributed most significantly. Finally, we discuss the case in which energy shocks can be Keynesian supply shocks.

"Technology Spillovers from the Final Frontier: A Long-Run View of U.S. Space Innovation" (with Luisa Corrado, Stefano Grassi).

Recent studies suggest that space activities generate significant economic benefits. This paper attempts to quantify these effects by modeling both business cycle and long-run effects driven by space sector activities. We develop a model in which technologies are shaped by both a dedicated R&D sector and spillovers from space-sector innovations. Using U.S. data from the 1960s to the present day, we analyze patent grants to distinguish between space and core sector technologies. By leveraging the network of patent citations, we further examine the evolving dependence between space and core technologies over time. Our findings highlight the positive impact of the aerospace sector on technological innovation and economic growth, particularly during the 1960s and 1970s

Work in progress

"Housing Markets and Macroprudential Policies during the Covid-19 Pandemic" (with Luisa Corrado, Stefano Grassi, and Margarita Rubio)

In this paper, we aim at disentangling the various forces that contributed to shape the housing market dynamics during 2020. While a large shock in household income should have put a downward pressure on house prices, due to low demand, this is not what we have observed in reality. Other factors, such as a change in preferences toward housing or speculative motives following expansionary monetary and regulatory policy may have been the cause of the house price soar. To disentangle all these mechanisms, we estimate a structural DSGE model, which features a housing market, to assess the various driving forces on housing markets during the COVID-19 crisis. In this framework, we consider several shocks that may have had an influence on the housing market during the pandemic to identify their relative importance . Preliminary results confirm the interpretation that households' demand for residential services has proven to be the most important factor in mitigating the negative oscillations in prices and quantities in this market.

Other publications

"Biomass Derived Combined Heat and Power from Decentralized Small-Scale Gasification: Updated Cost Conditions for the Italian Mountain Context and Competitiveness in Future Energy Markets" (with Lorenzo Menin, Stefano Piazzi, Daniele Antolini, Francesco Ravazzolo, and Marco Baratieri). Waste and Biomass Valorization (2025). https://doi.org/10.1007/s12649-025-02948-3

The EU has set ambitious targets to replace fossil fuels with renewable energy, aiming for 42.5% penetration by 2030. Bioenergy can be a significant contributor, especially in mountain areas with abundant residual biomass. However, regional planning for bioenergy adoption requires careful evaluation of levelized costs and key techno-economic risks. This study focuses on bioenergy from biomass gasification and combined heat and power (CHP) in South Tyrol. It uses techno-economic modeling to assess key factors affecting bioenergy LCOE, the impact of future renewable energy market conditions on competitiveness, and necessary subsidies to achieve price parity over the plant's lifetime. 

Book Chapters

"The technological and economic impact of 60 years of space exploration" (with Luisa Corrado and Stefano Grassi). In The Oxford Handbook on the 'New’ Space Economy. [Accepted]

This chapter reviews and contextualizes the economic effects of US space activities from the 1960s Space Race to the 2020s. Initially driven by Cold War geopolitics, early space efforts led to significant advancements like the Apollo missions and satellite technology. Today, the focus has shifted to sustainable space economy initiatives, where private companies take on more risks and receive more rewards, promising substantial commercial and scientific benefits. First, this chapter provides examples of how space investments have contributed to technological progress and economic growth. The chapter then analyzes the microeconomic and macroeconomic effects of space activities, outlining key contributions in both areas. The chapter concludes by highlighting new research directions to study the peculiarities of the emerging New Space Economy.