"Geopolitical Risk and Inflation: The Role of Energy Markets"
[latest version] [working paper] [slides] [GPR Macro -- GPR Energy surprises] [replication package]
Conditionally accepted at the Journal of International Economics
Geopolitical shocks transmitted through energy markets are on average inflationary and contractionary, while other geopolitical shocks are on average contractionary but disinflationary. Using high-frequency identification and sectoral evidence, the paper shows that energy exposure is key to their transmission and to the monetary-policy trade-off they induce.
"Fool's Gold? How the US Dollar lost its Shine", with K. Arvai (ECB) and N. Coimbra (Banque de France) [working paper] [slides]
Revise & Resubmit at the Journal of International Economics
Geopolitical risk makes dollar reserves less attractive because their safety depends partly on political alignment, while gold provides protection from sanctions at the cost of lower liquidity. Our model and empirics show that geopolitical risk shifts official reserves toward gold, especially in countries less aligned with the United States.
"CBDC Policy Rules", with M. Kumhof (Bank of England), Phurichai Rungcharoenkitkul (BIS), and A. Sokol (Bloomberg) [latest version] [working paper]
Reject & Resubmit at the Journal of Monetary Economics
We study how central banks should manage an interest-bearing CBDC that competes with commercial bank deposits in an open economy. CBDC rules responding to credit conditions can stabilize demand and inflation, improve welfare, and reduce exchange-rate and cross-border banking volatility.
"Crypto Shocks", with A. Cesa-Bianchi (Bank of England)
Work in progress
We identify shocks originating in crypto markets and trace their transmission to traditional financial markets and the corporate sector, with the goal of evaluating whether crypto-market fluctuations remain confined to digital assets or generate economically meaningful financial and real spillovers.
"Towards a New Monetary Theory of the Exchange Rate", with A. Cesa-Bianchi (Bank of England), M. Kumhof (Bank of England), A. Sokol (Bloomberg), and G. Thwaites (University of Nottingham) [latest version]
Work in progress
We develop a theory of exchange rates in which banks create the supplies of domestic and foreign currency, generating an endogenous monetary spread in the UIP condition. Shocks to relative loan supply and deposit demand can dominate standard UIP forces and help account for the UIP, Meese–Rogoff, and PPP puzzles.
"Global Spillovers of the Fed Information Effect", with A. Szczepaniak (Ghent University)
IMF Economic Review, 72(2), 773–819, 2024
Federal Reserve announcements reveal information about the US economy that moves global risk appetite, capital flows, and exchange rates independently of conventional monetary-policy shocks. Positive Fed information shocks weaken the dollar, boost emerging-market capital flows and equity prices, and ultimately stimulate global activity.