A Capital Markets Union (CMU) is the great hope of European policymakers. The plan for a CMU tries to reduce the reliance of European investors on banks and build up a market-based risk-sharing channel between member states. Our empirical analysis raises doubts that this can be achieved through...

The aim of this research is to estimate a two-country Dynamic Stochastic General Equilibrium Model (DSGE) for the euro area, core and periphery. The estimation is performed with Bayesian techniques using eleven macroeconomic time series. The model implements an automatic fiscal transfer...

This paper provides a comprehensive examination of the role of intertemporal risk sharing – or consumption smoothing – in absorbing the impact of asymmetric shocks in the euro area. We attempt to disentangle the role of international credit markets from domestic net savings and that of...

As a consequence of a technological change, the productivity of a factor may increase even when its supply increases. In this paper we analyze the determinants of this technological bias. We present a general equilibrium model, where a good is produced in the final sector using both a factor and...

We study how aggregate volatility is influenced by the propagation of idiosyncratic shocks across firms through the network of ownership relations. We use detailed data on cross-holdings as well as the relevant balance sheet information for almost the entire universe of Italian limited liability...

This paper reviews the experience of the ECB with the two-tier system for excess reserve remuneration that exempted a portion of banks’ excess liquidity (EL) holdings from the negative interest rate of the ECB’s deposit facility

In this paper we try to explain why the misallocation of resources across different productive sectors tends to persist over time. We document that there is a link between the distribution of the public expenditure across sectors and the sectoral composition of an economy. We propose a general...

In this paper we analyze the aggregate volatility of a stylized economy where agents are networked. If strategic relations connect agents' actions, idiosyncratic shocks can generate nontrivial aggregate fluctuations. We show that the aggregate volatility depends on the network structure of the...

Technological progress has been shown to affect early retirement via two opposite forces. On the one hand, it increases real wages and, therefore, creates incentives to delay retirement. On the other hand, it causes an erosion of workers' skills, which raises the probability of early retirement....