Published Papers

"The European Trust Crisis and the Rise of Populism" (with Yann Algan, Sergei Guriev and Elias Papaioannou), 2017, Brookings Papers on Economic Activity, 2018, 48(2): 309-400, CEPR Discussion Paper No. 12444, EBRD Working Paper No. 208. [ VOX, WSJ, FT, FOX BUSINESS, Pro-Market and Kathimerini.gr coverage]  

• We study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for non-mainstream, especially populist parties. Moreover, increases in unemployment go in tandem with a decline in trust in national and European political institutions, while we find much attenuated effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes towards immigrants is muted, especially for their cultural impact. To advance on causality, we extract the component of increases in unemployment explained by the pre-crisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to build-up and the burst of the crisis. Our results imply that crisis-driven economic insecurity is a substantial driver of populism and political distrust.     

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"Financial Flows and the International Monetary System" (with Hélène Rey), 2015, published in The Economic Journal, 125(584): 675-698, NBER Working Paper No. 21172. 

• We review the findings of the literature on the benefits of international financial flows and find that they are quantitatively elusive. We then present evidence on the existence of a global cycle in gross cross border flows, asset prices and leverage and discuss its impact on monetary policy autonomy across different exchange rate regimes. We focus in particular on the effect of US monetary policy shocks on the UK's financial conditions.

"Purchasing Power Parity in Tradable Goods" (with Ian Marsh and Lucio Sarno), 2012, in James, J., L. Sarno and I.W. Marsh (eds.) Handbook of Exchange Rates, London: Wiley

• A vast body of empirical research documents the linkage between nominal exchange rates and relative prices across countries. While excellent surveys exist in the literature on this topic, they focus largely on broad baskets of prices and, most commonly, on the consumer price index. This survey focuses on internationally tradable goods and services, rather than broad baskets that also include a substantial nontradable component. Specifically, the objective is to distill the literature on the properties of deviations from the law of one price applied to internationally tradable goods or sectors - i.e. the proposition that price levels of similar goods, expressed in a common currency, have a tendency to equalize over time. We conclude that a careful reading of the literature suggests that this notion of PPP holds in the long run for a broad range of tradable goods and services and for a broad set of currencies.

Policy Papers

"The Great Recession and the Rise of Populism", 2020, published in Intereconomics, 55(1): 17–21.

• Populist sentiment has been on the rise in Europe and the West for several years. The success of populist rhetoric in Europe is worrisome as it presents a threat to national and European institutions, the rule of law, and other fundamental free-market democratic institutions, such as freedom of the press and the independence of the judiciary system. Populism may also prove to be an impediment against further European integration by hindering the implementation of common social and economic policies. Are there common determinants of the recent populism surge among individual European countries or regions? The present contribution provides a positive answer to this question by focusing on the economic roots of populism.

Working Papers   

"Beyond Oil: The Origins of Commodity Price Fluctuations" (with Alvin Lumbanraja, Sarah Mouabbi and Adrien Rousset Planat)  [slides] [Le Monde coverage]

• Commodity supply shocks are a plausible but empirically elusive source of business-cycle fluctuations. We develop a comprehensive framework to measure them, constructing daily supply and demand proxies for 20 commodities—spanning energy, metals, agriculture, and livestock—from textual analysis of over one million news articles (2001–2023). These measures allow us to separate supply from demand across the full commodity market, not just oil. A striking finding emerges: non-oil supply disruptions affect inflation and industrial production at least as strongly as oil disturbances, a result previously undocumented in the literature. Transmission varies sharply with countries’ commodity trade positions: net importers experience more persistent output contractions and stronger inflation pass-through, while net exporters are partially insulated.

"Unpacking Commodity Price Fluctuations: Reading the News to Understand Inflation" (with Dimitris Malliaropulos and Filippos Petroulakis)

Bank of Greece Working Paper No. 334, CEPR Discussion Paper No. 20404, [VOX coverage]

• We show that text-based indicators of supply and demand disturbances in commodity markets provide distinct information about future inflation movements, relative to existing predictors and various measures of inflation expectations derived from financial prices or from surveys of professional forecasters and consumers. Specifically, we document that demand disturbances play a significantly larger role in prediction than supply disturbances because they typically lead to more correlated increases in quantities and prices of goods across the consumer basket, resulting in a clear and positive relationship between commodity prices and overall inflation. Local projections confirm that demand disturbances generate substantially larger inflation responses in the short- to medium-term. In terms of magnitudes, commodity-specific indicators reduce out-of-sample inflation forecast errors at the one-year horizon by up to 30 percent.

"Geoeconomics of Strategic Minerals in the Green Transition" (with Josh Kirk and  Hélène Rey)

• Energy transition is fundamentally reshaping the global economic order by creating new patterns of trade dependencies that differ structurally from those of traditional fossil fuel markets. Using network analysis of bilateral trade data spanning 1995-2023, we show that electrification materials exhibit concentrated hub-and-spoke systems different than the distributed multilateral structures of fossil fuels. We employ graph-theoretic centrality measures, local clustering coefficients and an Export Relationship Intensity metric that captures asymmetric influence to quantify structural differences between commodity networks. Our analysis reveals three main transformations: first, China's emergence as a leading actor in electrification materials after 2005, achieving systematic influence through strategic investments in processing capacity and supply chain integration; second, the dissolution of regional trading clusters in favor of centralized coordination as countries increasingly route trade through Chinese processing facilities; third, the emergence of material-specific dependencies that enable countries controlling particular critical minerals—such as the Democratic Republic of Congo (cobalt) and Indonesia (nickel)—to achieve strategic influence extending beyond their absolute trade volumes. Using measures based on large language models to assess supply and demand for specific electrification materials, we find that U.S. PPI and CPI are significantly exposed to surprises in critical material supplies.

"Financial Remittances and Gender Inequality" (with Dimitrios Minos)  

• This paper investigates whether remittance inflows contribute to reducing gender inequalities in recipient countries. Leveraging Bangladesh's 2015 labor agreements with Malaysia and Saudi Arabia as quasi-natural experiments, we analyze longitudinal household survey data to examine how remittances affect women's position within Bangladeshi households. We find that increased remittance flows correlate with improvements in women's household status. Importantly, the sender country's gender equality score relative to Bangladesh significantly matters beyond the remittance amount itself. When examining the comparable sub-sample of households with married male migrants in either Saudi Arabia or Malaysia, our triple interaction coefficient reveals divergent effects: wives of Malaysian migrants experience enhanced decision-making power, while wives of Saudi Arabian migrants face diminished household authority. These contrasting outcomes suggest the existence of a ``social remittances'' channel, whereby migrants transmit gender norms from host countries alongside financial transfers.

"Exchange Rates and Commodity Prices"   

• I build an exchange rate strategy that trades currencies conditional on changes in the global prices of commodity indices; hence, termed "commodity strategy". First, I document that commodity prices have significant out-of-sample predictive ability for the future exchange rates of several commodity exporters and importers at the daily frequency. However, I report that the reverse forecasting relationship does not survive out-of-sample testing. Second, I find a significant cross-sectional spread in both spot and excess returns of 6% p.a. between the currencies that are predicted to appreciate and those that are predicted to depreciate. The returns appear to be uncorrelated to those of popular exchange rate strategies such as the carry trade and currency momentum. Furthermore, the spread in returns is not explained by traditional risk factors; however, it is partly accounted for by the strategy's high transaction costs. Net profitability can be restored by either implementing a simple market timing rule or by investing in developed markets with low costs and high liquidity.

"In Quest for a Robust Model for the Exchange Rate: a Collective Approach"  (mimeo)

• I evaluate the predictive ability of a comprehensive set of empirical models of exchange rates, in addition to a standard technical trading strategy, on monthly exchange-rate returns for four developed and four emerging countries across different horizons. I implement a rolling window approach to the estimation and forecasting of the models, and construct an encompassing forecast. I also assess the economic value of the out-of-sample forecasting power of the empirical models using a simple dynamic allocation strategy, and find three key results: (1) the Taylor rule model consistently outperforms, economically and statistically, the interest rate parity, purchasing power parity, and monetary fundamental models as well as the technical trading strategy. (2) The technical rule has superior predictive power over the random walk benchmark. (3) There appears to be statistical gains from an unrestricted combined forecasting model. These results are robust across countries and horizons.

Work in Progress

"Are Commodity Markets Segmented? Understanding Cross-Asset Interdependencies Using Stochastic Spanning" (with Nikolas Topaloglou)