My research lies at the intersection of International Macroeconomics and Monetary Economics. I study how heterogeneity across households and countries shapes the transmission of trade and monetary policies, with a particular focus on their macroeconomic and distributional effects.
Quantitative Easing in a Heterogeneous Monetary Union , Job Market Paper
I study how Quantitative Easing (QE) transmits in a heterogeneous monetary union and whether it generates distributional effects. Focusing on the European Monetary Union (EMU), I incorporate two key sources of heterogeneity: cross-country differences in sovereign debt structure, including debt levels, maturity composition, and the liquidity of long-term bonds, and within-country heterogeneity in households’ access to financial markets. I develop a Two-Country, Two-Agent New Keynesian model in which the liquidity of long-term sovereign debt is explicitly governed by a pledgeability constraint, and calibrate it to core and peripheral euro-area economies during the Global Financial Crisis. QE operates through portfolio rebalancing, but the strength of this channel depends on the fraction of sovereign bond wealth that optimisers can mobilise when adjusting their portfolios, while household financial participation determines how the resulting income gains propagate to aggregate demand. I find that QE is expansionary and reduces income inequality in the short run, but its effects are heterogeneous across countries. Countries facing looser binding liquidity constraints and relying less on short-term public debt experience stronger portfolio rebalancing and larger output responses, while a higher share of hand-to-mouth households amplifies both aggregate and distributional effects. These findings show that uniform asset purchases can generate different outcomes across members of a monetary union because common interventions interact with country-specific sovereign debt structures and financial constraints.
Presented at ADRES (Paris, Sorbonne), HYRCE (Liege, HEC), Theories and Methods in Macro (Montreal, HEC), 53rd OeNB Annual Economics Conference (Oesterreichische Nationalbank , Vienna), MACRO PhD Workshop (London, LSE)
II. Retaliatory tariffs
Heterogeneous Exposure to Retaliatory Tariffs
This paper studies the macroeconomic and distributional effects of retaliatory tariffs in emerging economies. I first develop a simple two-country framework showing that retaliation combines two distinct channels: a foreign tariff reduces export income, while the retaliating country’s own tariff raises the cost of imported consumption goods. The magnitude of these effects therefore depends on countries’ pre-existing exposure to foreign demand and imported consumption. Motivated by this mechanism, I construct a novel consumption-weighted measure of retaliatory tariff exposure combining product-level tariff changes with predetermined import shares and household consumption weights. I apply this measure to China, India, Mexico, and Turkey over 2015–2022 and estimate dynamic responses using panel local projections. Higher retaliatory exposure is associated with a short-run deterioration in the terms of trade and the current account, a temporary decline in activity, and more delayed labour-market adjustment. In the pooled panel, retaliation is also associated with a redistribution of income toward the top of the distribution. However, country-specific estimates reveal substantial heterogeneity: the regressive pooled response is primarily driven by China, while India and Turkey display an initial compression of the income distribution and Mexico shows little systematic redistribution. Overall, the results show that the consequences of retaliation cannot be inferred from statutory tariff rates alone, but depend critically on the structure and exposure of the retaliating economy.
On the (de)stabilization role of protectionism (with A.Venditti)
Published in Journal of Mathematical Economics, 2024, vol 113, pp 102993 Link to the paper
To what extent protectionism affects growth and (de)stabilizes the economies? Although the impact of protectionism on growth has been widely explored without reaching a consensus, few has been said on its impact on macroeconomic stability. The present paper attempts to gauge more precisely its implications using a Barro-type (Barro, 1990) endogenous growth model with public debt and credit constraint where tariffs are a proxy of protectionism. Our main result is to show that when the debt level is high, and the share of foreign goods in total consumption is large enough, increasing tariffs may have a destabilizing effect generating some expectation coordination failures between multiple equilibria. We also exhibit some trade-off between tariffs and growth as tariffs are beneficial only to the low growth equilibrium which may only appear when the international interest rate is low enough. Finally, focusing on the local stability property, we show that the high BGP is always characterized by local indeterminacy, while the low BGP is always a saddle point. We then prove that tariffs may be responsible for the existence of large self-fulfilling fluctuations
Asymmetric Carbon Pricing in networked electricity (with C.Crofils, Universitat de Barcelona)
We investigate the macroeconomic consequences of heterogeneous carbon pricing schemes in the U.S. electricity sector. Within a two-country DSGE-E framework featuring region-specific power generation technologies, incomplete factor mobility, and endogenous emissions, we assess how alternative policy design such as state-level carbon taxes, propagate through production costs, interregional electricity flows, and household welfare. The model enables us to quantify differential transmission channels across states and to analyse the extent to which carbon pricing may exacerbate or mitigate regional disparities.