Research

Work in progress:

Sectoral Structure and the Real Effects of Monetary Policy: Evidence from US States-Sectors Responses (draft coming soon!)

Abstract:  This paper studies the sectoral structure channel in shaping the transmission of a common monetary policy shock across U.S. states and sectors operating in different states. Using granular data on sectoral output in the U.S. 50 states plus D.C., we document substantial heterogeneity both across states and across sectors. We provide new evidence on the presence of this heterogeneity between equivalent sectors located in different states, suggesting the presence of additional state-specific factors shaping exposure to interest rate changes. To assess the role of economic structure, we construct a share-based measure capturing sectoral composition the state level. The main findings show that (1) cross-state differences in industrial concentration do not explain differences in the observed heterogeneity; (2) sectoral composition is a relevant but insufficient predictor of monetary policy transmission heterogeneity.  Finally, we investigate potential network effects through interstate trade linkages and find no evidence of significant spillovers of monetary policy shocks to trade-partner states.

Contributions to books:

Vandone, D., Frigerio, M., Zatti, C. & Bakry, D. (2020). “Covid-19 and measures to support enterprises and local authorities in Italy: The role of Cassa Depositi e Prestiti”. In David A. McDonald, Thomas Marois and Diana Barrowclough (Eds.), “Public Banks and Covid-19, Combatting the Pandemic with Public Finance” (p 295- 310).