Welcome and news
Pierre Werner Chair at the European University Institute
Fellow of the British Academy
Professor Janeway Institute, Cambridge University
Curriculum and Short bio
Research Fellow Centre for Policy Research CEPR
Centre For Macroeconomics (CFM, ESRC)
The impact of trade policy and exchange rate shocks on trade (ESRC)
Short and Variable Lags Buda, G., Carvalho, V. M., Corsetti, G., Duarte, J. B., Hansen, S., Moura, A. S., Ortiz, A., Rodrigo, T., Rodríguez Mora, J. V., Alves da Silva, G., Janeway Institute Working Paper 2308;
EUI RSC; 2023/22; Pierre Werner Chair Programme
We study the transmission of monetary policy shocks using daily consumption, corporate sales and employment series. We find that the economy responds at both short and long lags that are variable in economically significant ways. Consumption reacts in one week, reaches a local trough in one quarter, recovers, and declines again after three quarters. Sales follow a similar pattern, but the initial drop, while delayed (one month), is deeper. In contrast, employment falls monotonically for five quarters albeit with a smaller impact reaction. We show that these short lags are masked by time aggregation at lower —quarterly— frequencies.
A text for the IMF Finance and Development: Rethinking Monetary Policy in a Changing World An unconventional collaboration, IMF F&D, March 1 2023
New and newly revised papers
New and Revised:
Gambling to preserve price (and fiscal) stability, with Bartosz Mackowiak, 2022, written for the IMF Economic Review
Revised February 2023: The Macroeconomic Stabilization of Tariff Shocks: What is the Optimal Monetary Response?, with Paul Bergin, March 2020, CEPR DP 14556 NBER WP 26995 Join the NEP-DGE Blog
Revised February 2023: Debt Crises, Fast and Slow, with Seung Hyun Maeng, February CEPR DP 14868, 2023
Revised March 2023: The elusive gains from inward-looking monetary policy, joint with Martin Bodenstein and Luca Guerrieri, previously CEPR DP 14359 February 2020
Sharing Asymmetric Tail Risk: Smoothing, Asset Pricing and Terms of Trade, with Anna Lipinska and Giovanni Lombardo.
The Exchange Rate Insulation Puzzle, Giancarlo Corsetti, Keith Kuester, Gernot Müller, Sebastian Schmidt CERP DP 15689. Voxeu column. Longer and more detailed version available as ECB WP 2630
Clavin, P., Corsetti, G., Obstfeld, M. and Tooze, A., Lessons of Keynes’s Economic Consequences in a Turbulent Century, CEPR DP 16610, JIWP Number 2108
Markets and Markups: A New Empirical Framework and Evidence on Exporters from China, Appendix, Online appendix, Giancarlo Corsetti, Meredith Crowley, Lu Han and Huasheng Song, July 2019. CEPR DP13904
Exchange Rate Misalignment and External Imbalances: What is the Optimal Monetary Policy Response?, with Luca Dedola and Sylvain Leduc, August 2022. Forthcoming, Journal of International Economics.
Invoicing and Pricing-to-market: Evidence on International Pricing by UK exporters, Giancarlo Corsetti, Meredith Crowley, and Lu Han, March 2022, Journal of International Economics.
British firms invoice in multiple currencies, even in the same destination market
UK data provide evidence that firms switch invoicing currency over time
Exchange rate pass through and pricing-to-market differ by invoicing currency
Firms adjust relative markups across markets only when invoicing in local currency
Within a year of the Brexit vote, all UK export prices aligned with the weak pound
Social Distancing the Supply Distortions in a Pandemic (revised December 2021), with Martin Bodenstein and Luca Guerrieri, April 2020 FED Board April 2020, CEPR DP 14629, JIWP 2017, Replication codes Media coverage Quantitative Economics
One Money, Many Markets: Monetary Transmission and Housing Financing in the Euro Area, with Joao Duarte and Samuel Mann, March 2020. CEPR DP 14968 Journal of the European Economic Association
Beyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantages, with Paul Bergin, American Economic Journal: Macroeconomics, 12(4):246-86, 2020, NBER WP
Official Lending Strategies During the Euro Area Crisis, Giancarlo Corsetti Aitor Erce and Timothy Uy, July 1 2020, Review of International Organizations. dataset
Liquidity and consumption: Evidence from three post-earthquake reconstruction programs in Italy, with Antonio Acconcia and Saverio Simonelli, American Economic Journal: Macroeconomics, July 2020
A century of arbitrage and disaster risk pricing in the foreign exchange market, CEPR DP 14497 with Emile Marin, March 2020
Coming at some point: The missing internal devaluation: Nominal and real adjustment to the Great Recession in the US, with Luca Dedola and Riccardo Trezzi
Debt Sustainability and the Terms of Official Support, Giancarlo Corsetti Aitor Erce and Timothy Uy, revised November 2019 (CEPR DP 13292, November 2018).
Debt Seniority and Sovereign Debt Crises, Anil Ari , Giancarlo Corsetti , Luca Dedola, IMF Working Paper No. 18/104, May 201
Fast trading and the virtue of entropy: evidence from the foreign exchange market, G. Corsetti, R. Lafarguette, and A. Mehl, ECB Working paper 2300 July 2019
The Making of the European Monetary Union: 30 years since the ERM crisis, edited by Giancarlo Corsetti Galina Hale Beatrice Weder di Mauro 20 Feb 2023
Column: The trauma of the European currency crises in the 1990s and the consequences until today, by Giancarlo Corsetti Galina Hale Beatrice Weder di Mauro, voxeu 2023
Policy documents and columns
A text for the IMF Finance and Development 2023: Rethinking Monetary Policy in a Changing World An unconventional collaboration, IMF F&D, March 1 2023
International policy coordination during disinflation, Giancarlo Corsetti Riccardo Trezzi, voxeu.org 16 Feb 2023
Shifts in expectations may undermine debt sustainability, Giancarlo Corsetti Lorenzo Codogno voxeu.org 3 Nov 2022
When flexible exchange rates don’t insulate economies from external shocks, Sebastian Schmidt Keith Kuester Gernot Müller Giancarlo Corsetti voxeu.org 27 Jan 2021
Stronger together? The policy mix strikes back, Elga Bartsch, Agnès Bénassy-Quéré, Giancarlo Corsetti, Xavier Debrun, voxeu.org 15 December 2020
Bartsch, E, A Bénassy-Quéré, G Corsetti, and X Debrun (2020), It’s all in the mix: how can monetary and fiscal policies work or fail together?, Geneva Report on the World Economy, No 23, ICMB and CEPR.
Debt Sustainability Analysis: State of the Art Study requested by the ECON Committee of the European Parliament, Economic Governance Support Unit Directorate-General for Internal Policies of the Union - November 2018 Direct access to text
Economic and Epidemiological Effects of Mandated and Spontaneous Social Distancing, Martin Bodenstein, Giancarlo Corsetti and Luca Guerrieri, Feb 24 2021
Teaching: monetary policy
A structured class on Optimal monetary policy in open economies, with technical appendix and dynare codes.
Optimal monetary policy in open economies joint with Luca Dedola and Sylvain Leduc, published in the Handbook of Monetary Economics, vol. III, Edited by Ben Friedman and Michael Woodford, 2010.
Exchange Rate Misalignment and External Imbalances: What is the Optimal Monetary Policy Response?, with Luca Dedola and Sylvain Leduc, January 2020. Technical Appendix
Cilento, Italy, 2013, Photo VC.