Working Papers
NEW version: Fiscal Policy and Inflation in the Euro Area, 2024, with Guido Ascari, Dennis Bonam and Lorenzo Mori (R&R at Journal of International Economics)
We investigate the relationship between fiscal policy and inflation dynamics in the Euro Area, with a focus on the post-pandemic inflation surge. Using a BVAR identified via sign restrictions, we disentangle the effects of various demand- and supply-side shocks, including fiscal policy, on inflation. First, while both positive demand and adverse supply shocks contributed to the inflation surge, demand shocks were relatively more important. Second, fiscal stimulus played a substantial and progressively increasing role, particularly in influencing domestic-based measures of inflation. Finally, despite cross-country heterogeneity in the inflationary effects of fiscal stimulus, fiscal shocks were largely synchronized across the Euro Area.
DNB Working Paper, CEPR Discussion Paper, or read a summary at SUERF Policy Brief, or listen to an AI generated Podcast 😉
NEW version: Uncertainty shocks and the monetary-macroprudential policy mix, 2022, with Valeriu Nalban (ERMAS Association Prize best young econ paper (1/2))
How should policymakers respond to uncertainty shocks? To explore and compare the macroeconomic effects of uncertainty shocks stemming from various conventional structural shocks, we develop a New Keynesian model incorporating borrowing constraints and time-varying volatility, featuring a monetary-macroprudential policy mix. Our findings indicate that the nature of uncertainty - whether demand, supply, or financial - significantly influences shock propagation, macroeconomic outcomes, and appropriate policy responses. Financial uncertainty, in particular, exerts more pronounced effects, underscoring the complementarity between interest rate adjustments and macroprudential policy measures. While both supply-side and demand-side uncertainty shocks present trade-offs between price stability and financial stability, their overall quantitative impact remains modest. Simulations of financial turmoil reveal that heightened financial uncertainty amplifies the adverse macroeconomic effects triggered by a first-moment financial shock. Moreover, our results demonstrate how the impacts of uncertainty shocks vary across different monetary-macroprudential policy frameworks, as determined by the calibration of the two reaction functions, offering novel insights for the policymakers.
Financial disruptions and heightened uncertainty: a case for timely policy action, 2020, with Valeriu Nalban
Estimating a real-time business conditions indicator for Romania, 2016, with Irina Stanciu and Andrei Tanase
Work in progress
Energy and monetary policy in the Euro Area, with Guido Ascari, Alice Albonico, Alexandre Carrier, Qazi Haque, and Kostas Mavromatis
Financial disruptions and the monetary-macroprudential policy mix, with Matthijs Katz
Policy work
DNB Analysis
The economic consequences of defence spending, 2026, with Bas Heerma van Voss, Daan de Leeuw, Fulvia Marotta, Camille Mehlbaum, Irina Stanga, and Stefan Wöhrmüller
DNB Occasional Studies
Competitiveness of the Dutch energy-intensive industry: energy prices, grid costs and ETS, 2025, with Bas Heerma van Voss, Guido Schotten, and Stefan Wöhrmüller
DNB Bulletin
Supply and demand shocks due to the coronavirus pandemic contribute equally to contraction in production, 2020, with Dennis Bonam
ECB Occasional Paper Series
Review of Macroeconomic Modelling in the Eurosystem: Current Practices and Scope for Improvement, 2021 (as part of the Eurosystem Modelling Work stream)
The natural rate of interest: estimates, drivers, and challenges to monetary policy, 2018 (as part of the WGEM Team on the Natural Rate of Interest)