RESEARCH

'UNCERTAINTY, INTANGIBLE CAPITAL & PRODUCTIVITY DYNAMICS' [Job Market Paper]

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Non-Technical Summary

Following an unparalleled rise in uncertainty over the Great Recession, the US economy has been experiencing anaemic productivity growth. This paper offers a quantitative study on the link between uncertainty and low productivity growth. Firstly, using micro-level data I show that uncertainty accounts for half of the drop in intangible capital stock during the Great Recession. Secondly, to investigate the effect of uncertainty on productivity growth dynamics, I present a novel general equilibrium endogenous growth model with heterogeneous firms that undertake intangible capital investment subject to non-convex costs and time-varying uncertainty. I show that uncertainty can generate slow recoveries and a persistent slowdown in productivity growth when accounting for the empirical discrepancy between the realised and expected changes to the second-moment of fundamentals.

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'NEWS UNCERTAINTY IN BREXIT UK' with Renato Faccini

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Watch RES 2019 Presentation (older version)

The behavior of the U.K. economy after the Brexit referendum has been surprising, as it did not exhibit a V-shaped recession, but a slow decline in economic activity. We model the referendum as a news shock, with the time horizon and the content of the news being uncertain. We show that the post-referendum behavior of the U.K. economy can be reproduced in an environment with heterogeneous firms facing non-convex adjustment costs when accounting for the long-expected duration of the negotiations. Intuitively, if the chances that uncertainty resolves in the short run are small, only relatively few firms find it worth to pay the inefficiency cost associated with an investment freeze. Concurrently, if the expected horizon of the news is longer, anticipation effects are smaller.
The calibration of the model is informed by expectation data from the Decision Maker Panel, a novel survey of U.K. businesses, where each CFO provides probability distributions over the expected Brexit date and the long-run expected outcome of Brexit on firm-level sales, for different Brexit scenarios. The long-run effects of Brexit implied by U.K. business expectations are large, entailing losses of 4.8% and 7.7% of GDP for Soft and Hard Brexit, respectively. The transitional dynamics under policy uncertainty show that the referendum has produced significant economic damage, with a three-year cumulative loss of GDP of about 2%. 

'UNCONVENTIONAL MONETARY POLICY, LEVERAGE & DEFAULT DYNAMICS'

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The objective of this paper to investigate the effectiveness of credit easing policy in mitigating the economic fallout from a financial recession using a model that can account for the observed default and leverage dynamics during the financial crisis of 2007. A general equilibrium model is developed with a financial sector and endogenous asset defaults able to account for the observed default and leverage dynamics. Following an adverse aggregate shock, banks deleverage through two channels: (i) higher non-performing loans provisions, and (ii) lower the marginal return of assets. Credit policy is modelled as an expansion of the central bank’s balance sheet countering the disruption in private financial intermediation. Unconventional monetary policy, namely credit easing policy, is shown to be ineffective in mitigating the effects of a financial crisis due to its crowding-out effect on the private asset market. Other non-monetary policy tools such as credit subsidies and their efficacy considered.

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REFERENCES

EDUCATION

2015-2019

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PHD in ECONOMICS

Expeceted to finish in 2019

2014-2015

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MRes in ECONOMICS

with Distinction

2013-2014

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MSC in ECONOMICS

with Distinction

CONFERENCES

EEA-ESEM 2017​

ISCTE – University Institute of Lisbon

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Royal Economic Society Conference 2018

University of Sussex

EEA-ESEM 2018

University of Cologne

Royal Economic Society Conference 2019

University of Warwick

SKILLS & LANGUAGES

TEACHING

MACROECONOMICS

Undergraduate 1st Year

Teaching fellow for Tim Lee.

BUSINESS CYCLES

Undergraduate 3rd Year

Teaching fellow for Roman Sustek.

FINANCIAL MARKETS & INSTITUTIONS

Undergraduate 2nd Year

Teaching fellow for Natalia Bailey & Radoslawa Nikolowa. 

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Awarded the School of Economics and Finance Economics Excellence in Teaching Award

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SPREADSHEETS & DATABASES in ECONOMICS and FINANCE

Undergraduate 1st Year

Teaching fellow for Guglielmo Volpe.

ECONOMICS and FINANCE in ACTION

Undergraduate 1st Year

Teaching fellow for Guglielmo Volpe.

Check out my Teaching Evaluation