Faculty Advisors

Guido Ascari

I am a PhD Candidate at the Department of Economics, University of Oxford, supervised by Prof Guido Ascari. My research interests are in macroeconomics, with a particular focus on the implications of firm heterogeneity and goods market frictions for macroeconomic policies. At present, I am a visiting student researcher at the University of California, Berkeley, hosted by Prof Yuriy Gorodnichenko.

During my graduate studies, I have completed internships at the International Monetary Fund (Washington, DC), the Central Bank of Lebanon (Beirut), as well as the macroeconomics research team of Goldman Sachs (London). I am also an incoming PhD intern at the Bank of England (London), as my cohort's David Walton Scholar. 

 

"Monetary Policy and Production Networks: an Empirical Investigation"

This paper offers novel econometric evidence on the contribution of production networks to the effect of monetary policy shocks on real macroeconomic variables. In particular, we construct a highly disaggregated monthly dataset on US final sectoral consumption to estimate that at least 20 to 45 per cent of the effect of monetary policy shocks on US aggregate consumption comes from amplification through input-output linkages, which facilitate downstream propagation of price rigidity. In order to develop our econometric specification, we obtain analytical sector-level solutions to a forward-looking New Keynesian model with asymmetric input-output linkages, using a novel finite-time approach. Our results survive a number of robustness checks, including the level of sectoral aggregation and the way in which monetary policy shocks are identified.

 

"State Dependence of Fiscal Multipliers: the Source of Fluctuations Matters" (with F. Zanetti)

We develop a general analytical theory of state-dependent fiscal multipliers for a broad range of spending and taxation policies. A crucial feature of our framework is the interaction between three empirically relevant goods market frictions: idle productive capacity, unsatisfied demand and price rigidity. In such setting, fiscal multipliers depend critically on the congestion in the goods market, whose cyclicality in turn varies with the source of economic fluctuations. Fiscal instruments that stimulate aggregate demand, such as government spending and consumption tax cuts, have multipliers that are large in demand-driven recessions, but small and possibly negative in supply-driven downturns. On the other hand, policies that boost aggregate supply, such as cuts in taxes on labor income, firms' payroll and sales, are ineffective in demand-driven recessions, but powerful if the downturn is driven by supply factors. Spending austerity, implemented by a reduction in government consumption, can be the policy with the largest multiplier in severe demand-driven booms and supply-side recessions, provided the labor market is sufficiently rigid. Our quantitative exercises suggest that fiscal multipliers are largely state-dependent, but conditioning on the source of fluctuations is crucial to empirically isolate their variation over the business cycle.