Research

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.

I.Monetary Policy in Heterogeneous Currency Area

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 (liquidity of long-term bonds, maturity composition, and debt levels) and within-country heterogeneity in households’ access to financial markets. I develop a Two-Country, Two-Agent New Keynesian model with an endogenous bond liquidity constraint and calibrate it to core and peripheral euro area economies during the Global Financial Crisis. The model highlights a central mechanism: QE operates through portfolio rebalancing, but its effectiveness depends on both bond liquidity - which governs the ability to adjust portfolios -- and household financial participation -- which shapes the transmission to aggregate demand. I find that QE is expansionary and tends to reduce income inequality in the short run. However, its effects are highly heterogeneous across countries. Economies with more liquid sovereign debt and lower reliance on short-term financing experience stronger output responses, while a higher share of hand-to-mouth households amplifies both aggregate and distributional effects. These findings imply that uniform QE policies in a monetary union can generate asymmetric outcomes across member states, highlighting the importance of accounting for structural heterogeneity when designing and evaluating unconventional monetary policy

HMU_HENRY_May_2026 (4).pdf

II. Retaliatory tariffs

Heterogeneous Exposure to Retaliatory Tariffs

Draft

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

Work in Progress

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.

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