Papers
Working Papers
The Macroeconomics of International Remittance Flows
Paper
Appendix
Twitter Summary
August 2026.
with M. Ludovica Ambrosino
Abstract
This paper studies the role of international remittance flows in macroeconomic stabilization. We leverage novel transaction-level data from a global Money Transfer Operator to study how individuals send remittances in response to macroeconomic shocks. We document four empirical results. (1) Using a staggered difference-in-differences design, we find that remittance inflows increase by 31% in the week following a natural disaster, consistent with remittances acting as private insurance. (2) Across staggered COVID-19 lockdown reopenings, remittances increased 43% on average over the subsequent ten months, consistent with a labor market recovery. (3) Leveraging the 2021 U.S. stimulus checks as an exogenous income shock, we estimate that remittances rose by 20% in the two weeks following disbursement. (4) The exchange-rate elasticity of sender-currency flows is negative, reaching −0.20 at a twenty-week horizon, consistent with the income effect of exchange rate fluctuations dominating the substitution effect.
We then develop a two-country heterogeneous-agent New Keynesian model featuring endogenous remittance flows. Two sufficient statistics—the intertemporal marginal propensity to consume (iMPC) and the intertemporal marginal propensity to remit (iMPR)—govern how income shocks propagate internationally through an international Keynesian cross, amplifying cross-country spillovers and generating co-movement absent in models without family linkages.
Liquidity and Labor Reallocation in an Uneven Economy
Paper
June 2025.
Abstract
This paper studies the interplay between the liquidity position of displaced workers and the choice of their next sector of employment, and its implication for economic fluctuations driven by sectoral shocks. I develop a heterogenous-agent framework featuring multiple sectors, frictional labor markets and costly labor reallocation. Changing sectors results in short-term productivity losses while exiting unemployment faster. More liquidity enables displaced workers to reallocate across sectors while smoothing out earnings losses. I document empirical evidence in support of this channel using administrative data from Washington state and exploiting a regression kink design. Displaced workers with more liquidity are more likely to switch industries upon re-employment. Industry switchers experience 10 percentage points lower immediate earnings compared to industry stayers, but the gap closes within 8 quarters. Calibrated to my data, the model predicts that more generous unemployment insurance fosters more labor reallocation. When shocks affect sectors unevenly, this leads to less severe recessions.
Global Value Chains and Inflation Dynamics: Does the Source of Inputs Matter?
Paper
January 2026. Revise & Resubmit at Journal of International Economics.
with Tommaso Aquilante, Aydan Dogan, and Melih Firat
Abstract
This paper investigates how Global Value Chains (GVCs) shape inflation dynamics and whether the source country of imported inputs matters. We develop a two-country model with input-output linkages and show that greater reliance on imported intermediate goods---our measure of GVC integration---affects inflation dynamics through two mechanisms: a direct cost channel, which flattens the Phillips curve by reducing the sensitivity of marginal costs to domestic conditions, and a cyclical channel, in which terms-of-trade movements transmit international relative-price fluctuations into domestic production costs. We test these predictions using UK industry-level data for 2000–2014 and find that industries with higher foreign-input shares exhibit a weaker relationship between inflation and the output gap. Crucially, this pattern is driven by inputs sourced from Emerging Market Economies (EMEs), not from advanced economies. To interpret this source asymmetry, we extend our model to a dynamic, multi-sector New Keynesian model with input–output linkages. Tariff-induced de-integration shocks generate similar aggregate responses but markedly different sectoral dynamics: sectors that rely heavily on foreign intermediates experience temporary expansions driven by strong substitution toward domestic inputs, while less open sectors exhibit broad output declines. These results show that the composition of GVCs---across both source countries and sectors---is central for understanding inflation dynamics in advanced economies.
Work in Progress
Discussions
Global Value Chains and the Phillips Curve by Florio, Siena & Zago
Discussion
2024 Bank of England / Banque de France / Banca d’Italia Workshop