Research Interests: Quantitative Macroeconomics, Labor Markets and Fiscal Policy.
Heterogeneous Agents, and Household Risk Sharing, Government Taxation and Debt Management.
Publications:
1. The Impact of Debt Levels and Debt Maturity on Inflation (2013) with E. Faraglia, A. Marcet and A. Scott PDF
The Economic Journal, vol.123, Issue 566, pp 164-192, February 2013.
2. Capital Taxes, Labor Taxes and the Household (2015) with C. Siegel PDF Journal of Demographic Economics, 81 (3), pp. 217-260
3. The Rise of the Added Worker Effect (2016) with J. Mankart PDF Economics Letters, 143 (June), pp. 48-51
Online Appendix PDF
4. Household Search and the Aggregate Labor Market (2017) with J. Mankart, Review of Economic Studies, 84 (4) PDF
Main Online Appendix PDF Online Appendix for UI PDF
5. Unemployment Insurance with Limited Commitment Wage Contracts and Savings (2018) BE Journal of Macroeconomics, (Advances) 18 (1) PDF
6. Optimal Debt Management in a Liquidity Trap (2018) with H. Bouakez and R. Priftis, PDF Journal of Economic Dynamics and Control, 93 (August), 5-21. Online Appendix PDF
7. Government Debt Management: The Long and the Short of It. (2019) with E Faraglia, A. Marcet and A. Scott PDF
Online Appendix PDF CEPR Discussion Paper 10281 Review of Economic Studies, Volume 86, Issue 6, November, Pages 2554–2604
8. Union Debt Management (2023) with J. Equiza- Goni and E. Faraglia, PDF , Journal of International Money and Finance, Volume 132, article 102747, February. Online Appendix PDF Older version CEPR Discussion paper 11181 PDF
9. Covid-induced Economic Uncertainty, Tasks and Occupational Demand (2023) with S. Blanas, PDF, Labour Economics, April, Special Issue on the Impact of Covid on the Labour Market, Carrillo-Tudela and Adams-Prassl eds.
10. Managing the Inflation-Output Trade-off with Public Debt Portfolios (2025) with B. Chafwehe and C. de Beauffort. PDF Forthcoming JEDC
Working Papers:
1. Long Term Government Bonds (2016) with E Faraglia, A. Marcet and A. Scott PDF
2. Optimal Monetary Policy with and without Debt. (2024) with B. Chafwehe, R. Priftis and L. Vogel PDF New version coming soon!
3. The Long and Short of Financing Government Spending (2023), with J. Mankart and R. Priftis Reject and Resubmit ReStud.
Online appendix New version coming soon!
Abstract: We study optimal policy in an environment where short-term government bonds provide liquidity/safety to the private sector. In our heterogeneous agent New Keynesian model, short-term bonds fulfill the demand of households for precautionary savings, which implies a lower return in equilibrium. Households do not require full compensation for inflation to hold this debt, and its real return does not align with consumption growth. We show that the Ramsey-optimal policy features a positive, time-varying inflation target. The government also finds it optimal to introduce volatility in (labor) taxes to depress the real return on newly issued short-term bonds, operating through a novel intertemporal tax distortion channel. When the government can issue both short- and long-term bonds, short debt is used as a shock absorber, similar to long-term debt. Quantitative simulations indicate that the resulting optimal debt maturity structure closely resembles that observed in U.S. data. Finally, we show that equilibrium multiplicity is an inherent feature of this environment. We develop a novel computational algorithm that robustly handles equilibrium multiplicity and enables a full characterization of the optimal policy.
4. Household Job Search: From the 1980s to the 2000s and beyond (2024), with J. Mankart and F. Pascucci. PDF Reject and Resubmit IER.
5. Debt Maturity and Government Spending Multipliers (2025), with M. Ghomi, J. Mankart and R. Priftis PDF
Online appendix PDF
6. Optimal Monetary Policy Rules in the Fiscal Theory of the Price Level (2022) with B. Chafwehe and C. de Beauffort. PDF
7. Optimal Fiscal Policy Problems Under Complete and Incomplete Financial Markets: A Numerical Toolkit (2014)
with E. Faraglia, A. Marcet and A. Scott PDF
8. Optimal Taxation with Heterogeneous Agents, with R. Nunes and K. Shakhnov Slides (preliminary version)
9. Permanent exemption from payroll taxes: The role of hiring frictions , with Bijnens, Desiere,Toniolo and Van der Linden, PDF
Work In Progress:
Heterogeneity, Precautionary Savings and Government Debt Management, with R. Nunes and K. Shakhnov.
The Value of Health and Longevity Under Incomplete Markets, with J. Ashwin, M. Ellison and A. Scott.
Fiscal Inflation and Monetary Policy under Preferred Habitat, with A. Doshchyn and M. Ellison.