Research

Working Papers

Job Market Paper

Relying on Intermittency: Clean Energy, Storage, and Innovation in a Macro Climate Model

[Paper]

The transition to clean energy technologies is essential to reduce CO2 emissions. One significant challenge associated with renewable energy sources, such as solar and wind, is their intermittency. I study the intermittency problem by introducing a novel micro-founded energy sector with directed technical change in a macro climate model. I show that the aggregate elasticity of substitution between clean and dirty energy crucially depends on the development of storage technologies. If the storage technology is not developed, the economy is trapped in a scenario in which the elasticity of substitution eventually becomes zero. Without policies, the provision of storage technologies is inefficiently low, impeding the transition towards clean, intermittent technologies. In the optimal allocation, the clean energy transition is accelerated with an initial clean energy share increasing from 22.5% to 63.5% and a reallocation of all R&D resources away from dirty energy towards clean energy and, in particular, energy storage technologies. The introduction of clean energy subsidies under the US Inflation Reduction Act is successful in increasing the short-run clean energy share, but insufficient to solve the intermittency problem.

Bank Lending and the Intangible Economy (with Pierre Dubuis and Carlos Vasco Chironda)

[Paper]

In the ever-evolving landscape of modern business, intangible assets have become increasingly important inputs to production. Due to their low value as collateral, the financing of intangible assets presents a challenge compared to their tangible counterparts, particularly in times of crisis. This paper investigates whether, during a financial shock, banks cut lending relatively more to intangible-intensive firms than to tangible-intensive firms and the reasons behind this heterogeneity. We empirically investigate this question in the context of the Italian sovereign debt crisis. In regions where banks are more exposed to sovereign risk, firms have, on average, less bank debt. More importantly, we find that the decrease in bank debt associated with being in highly exposed regions is of a larger magnitude for firms with higher shares of intangible assets. We then use a two-period general equilibrium model to rationalize our empirical findings. We examine whether bank capital requirements or banks' risk aversion to default can explain a heterogeneous credit crunch. While introducing a minimum capital requirement does not lead to the observed heterogeneity, banks' risk aversion to default results in a bias against intangible-intensive firms. In times of financial distress, banks rebalance their loan portfolios towards firms offering safer collateral to avoid the risk of being unable to repay depositors in case firms default on their loans.

Work in progress

Solar Innovation and the Rise of China (with David Hémous, Roza Khoban, and Carole Marullaz)

Other Writings

The Global Diffusion of Clean Technology: China and the Solar Energy Boom (with David Hémous and Roza Khoban, Kühne Impact Series 04-23, Kühne Center for Sustainable Trade and Logistics, University of Zurich)