RESEARCH INTERESTS
Macroeconomics. Theoretical and Empirical Analysis on:
Business Cycle with Endogenous Firm Dynamics and Heterogeneity
Models with Non-linearities, Asymmetries and Uncertainty.
Models with Firms Heterogeneity and Structural Changes.
Models with Financial and Labour Market Frictions.
Optimal Monetary and Fiscal Policy,
Estimation of DSGE models, and SVAR analysis.
NEW Working Papers ⚡⚡
with Wondatir Atanafu Gebre (Lancaster University) & Pavel Chakraborty (University of Bath)
Abstract
How do climate shocks propagate beyond agriculture and affect industrial productivity in low-income economies? Using panel data from Ethiopia’s Large and Medium Manufacturing Industry Survey (2008–2018) matched with drought exposure measures from the Standardised Precipitation Evapotranspiration Index (SPEI), we estimate the impact of climate shocks on manufacturing firms’ Total Factor Productivity (TFP). Exploiting the 2011 La Niña drought and the 2016 El Niño event, we implement the Callaway and Sant’Anna (2021) staggered difference-in-differences estimator with doubly-robust inverse probability weighting and TFP estimated following Levinsohn and Petrin (2003). We document three key findings: (i) drought reduces firm TFP by 2–3.5 percent, with effects emerging gradually and persisting over time; (ii) non-agri-dependent firms respond earlier, primarily through demand and financial channels, while agri-dependent firms exhibit delayed effects consistent with slower supply-chain transmission; and (iii) repeated drought exposure amplifies productivity losses non-linearly, with the 2016 drought generating larger and more persistent effects than the 2011 episode. In terms of mechanism, drought-induced labour productivity disruptions and raw material shortages are the primary transmission channels, compounded by declining rural demand and limited firm adjustment capacity. Our findings provide the first firm-level evidence that climate shocks impose substantial and persistent productivity costs on manufacturing firms in Sub-Saharan Africa and highlight the importance of resilience-oriented industrial policies.
Abstract
We study the macroeconomic effects of green technology news shocks using novel UK patent data. We construct novel instruments based on published and granted patents, distinguishing green from total innovation. We find that signals from published green patents (still pending and not yet granted) reflect greater uncertainty and imply recessionary effects and a decline in productivity, whereas news on green innovations based on granted patents raise productivity and output overtime. Over time, sector-level responses confirm these asymmetries, highlighting how the timing and viability of green innovation shape economic outcomes. A DSGE model with endogenous uncertainty and an option to delay investment and hiring explains the differential effects of green news shocks based on published versus granted patents.
Belief Distortions and Uncertainty about Inflation, with S. Fasani, G. Pagano-Giorgianni and V. Patella ⚡💥,
forthcoming Journal of Political Economy: Macroeconomics
Abstract
This paper studies the macroeconomic effects of a belief distortion shock—defined as the unexpected component of household inflation expectations after accounting for professional forecasts and observable fundamentals. Using survey data, U.S. macroeconomic variables, and machine-learning methods, we identify this shock and examine its effects both within and outside the zero lower bound (ZLB), conditioning on household inflation uncertainty. The shock raises inflation, uncertainty, and unemployment in normal times. At the ZLB, the shock reduces real interest rates and becomes expansionary; however, the accompanying rise in inflation uncertainty dampens or can even reverse these effects. A New Keynesian model with belief shocks replicates these dynamics and matches the empirical patterns of inflation uncertainty.
Capping the Giants: CEO Pay, Firms Size and Productivity. SSRN WP 20 Feb 2026 ⚡💥
Abstract
We study how CEO compensation relates to firm size and firm-level productivity. Using U.S.\ firm-level data from 1992--2024, we show that CEO pay scales strongly with firm size. Quantile regressions indicate that productivity plays a secondary role: while measures of firm-level productivity are sometimes priced at lower and middle quantiles, their contribution is modest relative to scale and does not strengthen at the top of the pay distribution. We then impose counterfactual pay caps at the 80th and 50th percentiles of the compensation distribution. These caps bind primarily for large firms and flatten the pay--size relationship, but do not strengthen the link between pay and productivity. An event-study analysis around the 2017 Tax Cuts and Jobs Act shows no significant change in the pricing of size or productivity. We conclude with a simple assignment model that rationalizes these findings and highlights why CEO compensation remains primarily scale-based.