Academic Publications

Interactions and Coordination between Monetary and Macro-Prudential Policies, American Economic Journal: Macroeconomics (2021).

Abstract:

I study monetary and macro-prudential policy intervention in a general equilibrium economy with recurrent boom-bust cycles. Recurrence causes forward-looking variables to also react to policy intervention during phases in which the intervention is inactive. Macro-prudential policies that contain systemic risk in financial markets during booms, therefore, relax market-based funding constraints during busts, which helps mitigate the severity and shorten the duration of economic meltdowns. Contractionary monetary interventions during booms also have (latent) beneficial effects during busts. Coordination between the two policy instruments improves social welfare over standard, non-coordinated policy interventions, but improvement is moderate.

The Political Economy of Sovereign Defaults, with Eugenia Andreasen and Guido Sandleris, Journal of Monetary Economics 104 (2019): 23-36.

Abstract:

How do income distribution and the tax system affect sovereign borrowing and default decisions? Are these effects shaped by the political constraints that governments face when raising revenues to repay the debt? To address these questions, we incorporate agent heterogeneity, in terms of income distribution and tax burden, and a political support constraint into a standard DSGE model of sovereign default. The results show that income inequality and regressive taxes make defaults more likely for a given level of debt while they reduce sovereign borrowing in equilibrium. Tighter political support requirements reinforce these effects.

Non-academic Publications

On the Interactions between Monetary and Macroprudential Policies, with Alberto Martin and Caterina Mendicino, ECB Working Paper, No. 2021/2527, 2021.

Macro-Prudential Policy Measures: Macroeconomic Impact and Interaction with Monetary Policy, with Gabriele Cozzi, Matthieu Darracq Paries, Peter Karadi, Jenny Korner, Christoffer Kok, Falk Mazelis, Kalin Nikolov, Elena Rancoita, and Julien Weber, ECB Working Paper Series, Technical Paper, 2020.