Research

Working papers

Will the green transition be inflationary? Expectations matter (joint with Valerio Nispi Landi), Questioni di Economia e Finanza Banca d'Italia (occasional papers) N. 686.

We analyse a progressive increase in the tax on emissions in a simple two-period New Keynesian model with an AS-AD representation. We find that the increase in the tax today exerts inflationary pressures, but the expected further increase in the tax tomorrow depresses current demand, putting downward pressure on prices: we show that the second effect is larger. However, if households do not anticipate a future fall in income (because they are not rational or the government is not credible), the overall effect of the transition may be inflationary in the first period. We extend the analysis in a medium-scale DSGE model and we find again that the green transition is deflationary. Also in this larger model, by relaxing the rational expectations assumption, we show the transition may initially be inflationary. 

Looking behind the financial cycle: the neglected role of the demographic cycle [Slides] [non technical summary (in Italian)], Temi di discussione Banca d'Italia (working paper series) N. 1149

Data demonstrate a correlation between demographic variables and financial cycles: an increase in the working age population is associated with an expansion of the financial cycle, that is, credit growth and increased housing prices. To account for this stylized fact, this paper uses an OLG model with data on housing prices, life-cycle of income, and consumption. A transitory baby boom, which increases the working age population, leads to higher housing prices and household borrowing. 

Selected publications

Whatever it Takes to Save the Planet? Central Banks and Uncoventional Green Policies (joint with Valerio Nispi Landi), Macroeconomic Dynamics, 1-26. doi:10.1017/S1365100523000032. The paper has been covered also by Reuters and in a policy note for SUERF 

Presentations: ECB internal seminar, Banca d'Italia lunch seminar, Macroeconomic Dynamics, e-axes Forum on Climate Change, Riksbank, EEA-ESEM.

Toward a green economy: the role of central bank’s asset purchases (joint with Valerio Nispi Landi), forthcoming in Internationl journal of Central Banking. The paper has been covered also in a policy note for SUERF and the model has been used for assessing the impact of carbon tax on euro area economy in ECB economic bulletin article The macroeconomic implications of the transition to a low-carbon economy 

Other research projects

Losers amongst the losers: the welfare effects of the Great Recession across cohorts, Research in Economics, Volume 77, Issue 1, 2023, Pages 34-59, ISSN 1090-9443, doi:10.1016/j.rie.2022.12.002 . The paper has been covered also by Bloomberg

Economic Growth and Wealth Inequality: the Role of Differential Fertility (joint with Alessandro Di Nola) [Slides 1 - Slides 2]