RESEARCH

PEER-REVIEWED PUBLICATIONS

This paper studies whether the advent of financial globalisation has contributed to increasing wealth inequality in the United States, France, and the United Kingdom. I find that (i) positive changes in the benchmark measure of financial globalisation are associated with a positive change in the top 1% and 10% wealth shares and a negative change in the wealth share of the bottom 50% of the distribution. This is equivalent to an average gain of $1 trillion for the top 10% and $1.6 trillion for the top 1%, over the period of interest. (ii) Portfolio equities and financial derivatives appear to be the driving components behind the increase in wealth share. (iii) The implied change in wealth shares is driven by the accumulation of new financial wealth (flow) rather than the valuation of existing one. (iv) The dynamic is strengthened when a banking crisis hits the economy, possibly because people at the top of the distribution can recover their lost wealth faster than people at the bottom.  The main finding is robust to an expanded country sample, albeit reducing the historical context beyond the scope of this paper.
Presented at: PennState Altoona International Conference on Empirical Economics (scheduled), EconomiX PhD Conference International Macro, Royal Economic Society 2024,  FIW Research Conference 2024, EAYE 2023, JIE Summer School (Poster), YSI Pre-Conference IARIW-Bank of Italy 2023, Italian Economic Association 2022, Roma Tre University, European Economic Association 2022, Irish Economic Association 2022, Central Bank of Ireland, IPECE Workshop 2021, Trinity College Dublin.

The long and the short of it: Inheritance and wealth in Ireland | The Journal of Economic Inequality (forthcoming)

with Laura Boyd (CBI) and Tara McIndoe-Calder (CBI)

🐦 Twitter thread (WP)

📄 TEP Working Paper (2023) 📄 CBI Economic Letter (2023) - covered in The Irish Times (1), (2), (3), RTÉ News, Irish Independent, Irish Examiner

Inheritances matter for wealth accumulation and are often central to policy debates on wealth taxes. Using household level survey data, this paper shows that up to 2020 over one-third of households in Ireland had inherited wealth, the cumulative value of which (€97 billion) accounts for approximately one sixth of current net wealth for these households. However, the impact of inheritance extends beyond its direct value as inheritors tend to be wealthier, with a greater ownership of property. Our analysis shows that inheritances in Ireland contribute little to wealth inequality, and may even have reduced it over time, in line with existing findings for Britain and the United States. Tentative evidence suggests that mechanisms behind this wealth equalising effect may be (i) the importance of inheritances for the acquisition of property assets for middle-wealth households, (ii) the rise of asset prices, especially house prices, and (iii) substitution from employee income to rental income among inheritors.
Presented at: TU Dublin (by coauthor), ECINEQ 2023, Irish Economic Association 2023, IPECE Workshop 2023, European Central Bank, Central Bank of Ireland.
In this paper we assess the merits of financial condition indices (FCIs) constructed using equal weights averaging versus alternatives that use data reduction techniques, like principal components, or that allow for time-varying parameters. Our analysis is based on data for 18 advanced and emerging economies at the monthly frequency covering about 70% of the world's GDP. We study the performance of these indicators based on their ability to capture tail risk for economic activity and to predict banking and currency crises. We find that  averaging with equal weights produces FCIs that are not inferior to, and often perform better than, those constructed with more sophisticated statistical methods. For the US and for the euro area, based on the same evaluation criteria, they also work better than two popular alternatives that receive wide attention in policy discussions, namely the Chicago Fed National Financial Conditions Index and the Composite Index of Systemic Stress.
Note that the working papers were circulated under the title: "The simpler the better: measuring financial conditions for monetary policy and financial stability"
Presented at: Central Bank of Ireland, 7th RCEA Time Series Workshop, European Central Bank.

WORKING PAPERS

Unravelling household financial assets and demographic characteristics: a novel data perspective

with Agustín Bénétrix (TCD), Tara McIndoe-Calder (CBI), Davide Romelli (TCD)

Coming soon!

📄 CBI Economic Letter (Apr 2024) 

🎞️ Presentation at Bde-BIS-ECB Conference (min 35)

This paper presents a novel dataset that combines granular information on financial assets from the Security Holdings Statistics (SHS) with household characteristics from the Household Finance and Consumption Survey (HFCS). We illustrate one of its potential uses by studying the link between portfolio returns and risk with education. First, we provide a non-parametric exercise taking Ireland as a case study and report a robust link between high education levels and returns. Moreover, we find that more educated households exhibit higher risk tolerance and portfolios structured to realise greater gains in periods of elevated positive risk, albeit being more susceptible to losses in challenging times. Second, we expand the illustrative example to a country panel setting and address the previous question following non-parametric as well as parametric methods. Interestingly, the previous results for education and returns also emerge in this setting. These are robust to the inclusion of unobserved conditioning factors and macro-financial controls. We outline avenues for potential research and analysis that our novel dataset may contribute to in the future.

Presented at: Irish Economics Association 2024, ECB HFCN research seminar (by coauthor), BdE-BIS-ECB External Statistics Conference 2024.

WORK IN PROGRESS

Beyond borders, within societies: Inequality and the global transmission of US monetary policy

Presented at: IPECE Workshop 2024, Trinity College Dublin.

POLICY PUBLICATIONS

PAPER DISCUSSIONS

Inequality, current account imbalances and middle incomes by Océane Blomme (Université de Lille) and Jérôme Héricourt (Université Paris-Saclay), discussed at the 13th PhD Student Conference on International Macroeconomics (Université Paris Nanterre)


Cyclical transactions and wealth inequality by Jung Sakong (Chicago Fed), discussed at IARIW - Bank of Italy Conference 2023 (Naples)