Exchange-Rate Pass-Through and Invoicing Currency Choice in International Production Networks (2026), with Alessandro Ferrari, Eric Kammerlander, Sarah Lein and Frank Pisch [working paper] [online appendix], CEPR Discussion Paper No. 21144.
Abstract: We study exchange-rate pass-through and currency choice in international transactions, focusing on bilateral bargaining power in relationships between domestic buyers and foreign suppliers. Using detailed transaction-level data on Swiss imports from 2014–2023 identifying buyers and suppliers, we show that exchange-rate pass-through is lower for economically important suppliers within a buyer’s network. This pattern is explained by a higher likelihood of invoicing in the buyer’s currency, consistent with a bilateral bargaining model of price setting and endogenous currency choice. Our results imply that bilateral bargaining power shapes how foreign shocks affect prices and external adjustment, making policy transmission network-dependent.
Robust Bank Lending in a Changing Credit Market Environment (2025), with Romain Baeriswyl and Maja Ganarin [article], Swiss National Bank Economic Note No. 13/2025
Abstract: The Swiss credit market environment has changed significantly since 2022. Interest rates have risen for the first time in 15 years, UBS has acquired Credit Suisse, and regulatory requirements have been tightened. The latter includes the introduction of the "Basel III Final" banking regulation and more stringent liquidity requirements for systemically important banks. Despite these changes, credit volumes have increased robustly in Switzerland, and bank lending has adjusted to both the tightening and subsequent loosening of monetary policy, as expected.
Endogenous Product Adjustment and Exchange Rate Pass-Through (2023), with Sarah Lein [article] [working paper], Journal of International Economics, 140, 103706
Abstract: We document how product quality responds to exchange rate movements and quantify the extent to which these quality changes affect the aggregate pass-through into export prices. We analyze the substantial sudden appreciation of the Swiss franc post removal of the 1.20-CHF-per-euro lower bound in 2015 using export data representing a large share of the universe of goods exports from Switzerland. We find that firms upgrade the quality of their products after the appreciation. Furthermore, they disproportionately remove lower-quality products from their product ranges. This quality upgrading and quality sorting effect accounts for a substantial share of the total pass- through one year after the appreciation. We cross-check our results with the microdata underlying the Swiss export price index, which includes an adjustment factor for quality based on firms' reported product replacements, and obtain similar results.
Inflation Dynamics in Advanced Economies: A Decomposition into Cyclical and Non-Cyclical Factors (2022), with Weicheng Lian [working paper], IMF Working Paper No. 2022/091
Featured in the IMF World Economic Outlook
Abstract: Inflation and unemployment rate were largely disconnected between 2000 and 2019 in advanced economies. We decompose core inflation into two parts based on the cyclical sensitivity of CPI components and document several salient facts: (i) both the cyclical and non-cyclical parts had surges across advanced economies in 2011, when unemployment rates had limited changes; (ii) the non-cyclical part had a downward trend between 2012 and 2019, which existed across countries, sectors, goods, and services; (iii) global indexes such as oil price, shipping costs, and a global supply chain pressure index do not explain the downward trend; and (iv) the cyclical part, after controlling for the impact of economic slack, also had a downward trend between 2012 and 2019. These patterns help disentangle competing explanations for the disconnect between inflation and unemployment rate. The approach has potential to help understand forces shaping price pressures during the pandemic and in the post-pandemic period ahead.
Communication and Market Sharing: An Experiment on the Exchange of Soft and Hard Information (2021), with Catherine Roux and Christian Thöni [article] [working paper] International Economic Review, 62(1), pp. 175-198.
Abstract: We study the role of communication in collusive market sharing. In a series of Cournot oligopoly experiments with multiple markets, we vary the information that firms can exchange: hard information—verifiable information about past conduct—and soft information—unbinding information about future conduct. We find that the effect of communication on the firms’ ability to collude depends on the type of information available: while market prices increase only slightly with hard information the price raise due to soft information is substantial. Our results point to the types and contents of communication that should be of particular concern to antitrust authorities.
Intrafirm Trade and Exchange Rate Pass-Through
The Duration Channel of Monetary Policy, with Giovanni Lombardo