Joined March 2016
Il degrado del dibattito pubblico italiano dipende soprattutto dalla sua élite. Qui abbiamo un rettore universitario che, oltre a quasi dimezzare la popolazione della Corea del Sud (sono 52 milioni di abitanti), paragona i piani di investimenti privati pluriennali a Seul (500 miliardi) alla legge di Bilancio a Roma (17,8 miliardi), come se questa non fosse la variazione rispetto al bilancio precedente (da oltre 1.000 miliardi) ma l’intero ammontare delle risorse impiegate dallo Stato italiano. È un paragone così insensato su così tanti livelli che non si sa neppure da dove cominciare. Un esempio banale: lo stato italiano ha speso in pochi anni circa 500 miliardi solo tra bonus edilizi e Pnrr. Sono stati investimenti più produttivi e innovativi degli investimenti di Samsung e altri chaebol coreani?
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Ah, the Great Copper Deficit™… …just around the corner. Where it has been for as long as I can remember. #copper
There is expected to be a big shortfall in copper form 2027, per FT:
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This is next week 🤩
Next week, @SakiBigio (@UCLA) will present his paper "The heterogeneous bank lending channel of monetary policy" @vimacro_org Registration: vimacro.org/attend Info/Paper: vimacro.org/saki-bigio-heter… #OnlineSeminar #Economics #Research #Banks #MonetaryPolicy #Heterogeneity
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Finally someone did it!
LeanEconomics github.com/LeanEconomics/Lea… Current: prove existence of stationary general eqm for Aiyagari 1994, plus uniqueness for mu=1 (already known, now Lean formalized). Please feel free to join the Github org and contribute to Econ in Lean. Explain: shorturl.at/vpChP
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simemi84 retweeted
Asset privatization as intergenerational redistribution instrument has the automatic stabilizer property, while pension based redistribution faces downward rigidity when growth slows down and population ages…
Subsidized access to appreciating public assets in rapidly growing economies can serve as a powerful instrument for intergenerational redistribution, from Kaiji Chen, @HanmingF, and Yang Tang nber.org/papers/w35754
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Things are heating up on Terry Tao’s blog. In “If Math Is More Than Proof, We Need to Better Celebrate the Rest of It,” Grant Sanderson of @3blue1brown proposes “open exposition problems” -- rewarding the work of making math genuinely understandable. terrytao.wordpress.com/2026/…
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simemi84 retweeted
A few (personal) thoughts on reading empirical AI papers on the economy. Economists have gotten used to reading papers with super clean identification, arguing about the validity of an instrument, making sure parallel trend assumptions are satisfied. This is what gets you into a top journal, and it is *very* important research (no question here). But it also takes years and sometimes decades to get these types of papers right---people often don't find a good instrument to answer a specific causal question decades after the natural experiment. We will eventually have this type of research for AI as well, and it is absolutely necessary. But right we also need signals *right now*, even if they are noisier than what we are used to. We need papers where we can trust that researchers did their best methodologically, while at the same time acknowledging that the space is moving way too fast to wait for perfect identification. This will allow us to accumulate enough signals, coming at the same question using different angles, for example, to say "yes, X is likely happening in the economy". The AI exposure and early career hiring papers are a good example of this. There is no silver bullet paper with super clean identification. But at this point we have several independent teams reaching the same general conclusion, enough where we can say "there seems to be a slow down in AI-exposed, early career hiring."
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Ratings largely determine spreads. Yet, their construction remains largely a black box. Our paper assesses the relative importance of debt, deficits and country specific effects in the determination of these ratings. The evidence is at odds with a simple model of default: more importance of debt, less importance of forecast deficits, limited role of r-g, surprisingly large role of country effects. We are agnostic. The model may be too simple in some fundamental ways. Or the rating agencies may be using incorrect weights. Or a mix of the two... We hope the paper triggers a useful discussion.
Super interesting! "Ratings, Debt, and Deficits: An Exploration" by Olivier J Blanchard, Daniel Leigh, and Prachi Mishra. "We look at the effects of debt and primary fiscal balances on sovereign credit ratings through the lens of a simple model. We find that the ratings differ from the implications of the model in three important ways. They give much more weight to debt relative to forecast primary balances. They understate the effects of the difference between the interest rate and the growth rate. They give a very large role to country effects. For the same level of debt and forecast primary balances, they imply extremely different ratings across countries, and imply extremely different levels of debt needed to reach a given rating." imf.org/en/publications/wp/i…
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🚨New lecture note 🚨 🧵1) Neural networks tend to learn low frequencies first, and only later the high-frequency oscillations, if at all. Left panel: training data and the neural-net fit. Right panel: their Fourier transforms. code: github.com/Mekahou/Notes/blo…
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Highly relevant! "Hegemonic Globalization" by Fernando Broner, Alberto Martin, Josefin Meyer, and Christoph Trebesch. "How do shifts in the global balance of power shape globalization? We develop a theory of alignment-based “hegemonic globalization,” built on two premises: countries differ in their preferred policies, and trade increases with policy alignment. Because access to large markets is especially valuable, hegemons foster policy alignment and thereby global economic integration. A unipolar world dominated by a sufficiently large hegemon tends to support globalization, while the emergence of a competing hegemon with different policy preferences can trigger fragmentation. Such fragmentation lowers global welfare and is most costly for the incumbent hegemon and its closest allies. To evaluate the theory's key mechanisms, we create the Global Treaty Database, covering the near-universe of international agreements signed between 1800 and 2020. Treaties formally codify policy alignment, and two-thirds of them concern economic integration. As predicted by the model, countries shift their alignment towards powerful hegemons, alignment strongly predicts bilateral trade, and countries aligned with the same hegemon also trade more with one another." ecb.europa.eu/press/conferen…
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Food for thought! "Artificial Intelligence and Labor Market Reallocation" by Hie Joo Ahn and Nicholas A. Carollo. "This paper documents how artificial intelligence has affected stocks and flows in the U.S. labor market. ...The natural rate of unemployment—recovered from the trend components of unemployment inflows and outflows by AI exposure and adoption, as well as from a theoretical model of structural unemployment—is estimated to have risen by about 0.1-0.2 percentage point since the introduction of LLMs, albeit with considerable uncertainty" conference.nber.org/conf_pap…
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Il #governo #Meloni ha deciso di abolire dal 2027 il bollo per le auto piccole. Bene. Ma non riuscirà ad evitare di ridurre le accise se i prezzi di benzina e gasolio continuano a salire. Ma soprattutto, cancellare il bollo auto non significa che le tasse stiano scendendo, anzi, la pressione fiscale è prevista ancora in aumento, di circa 0,3 punti l’anno prossimo. Il motivo è anche il ritorno dell’#inflazione e con essa del fiscal drag: poiché scaglioni e detrazioni fiscali non sono indicizzati, la pressione fiscale aumenta automaticamente con l'inflazione. Con la guerra che continua, l'inflazione cumulata nel biennio 2026-2027 sarà certamente superiore allo scenario base: con inflazione sul biennio al 4,4% il fiscal drag salirebbe a 2,5 miliardi di maggiori imposte, con il 6% a 5 miliardi. Il paradosso è che, con più fiscal drag, saranno proprio i contribuenti a finanziare in futuro la cancellazione del bollo auto. @leonziorizzo
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Highly relevant! "The New Supply-Side Era: The O-Ring Meets Geopolitics" by Peter Orszag, Eric Van Nostrand, Noah Barbieri, and Layla McDermott. "For most of the postwar era, economists’ default explanation for output and inflation fluctuations was aggregate demand: variation in household consumption, business investment, the fiscal impulse, and the inventory cycle. As supply chains extended across the world and China’s role within them increased, the ease of substituting one source of supply for another made managing demand the central challenge for policymakers. The supply side of the economy seemed to recede as a source of higher-frequency macroeconomic risk. The steady, low-variance, and largely predictable expansion of productive capacity absorbed shocks; if one source for a good grew expensive or unreliable, an alternative was just a container ship away. Today, we need to update this framework and recognize the predominant role of the supply side in macroeconomic fluctuations as well as many associated puzzles in global economics. The pandemic, artificial intelligence, Russia’s invasion of Ukraine, tariff shocks, China’s rare-earth export controls, and the war in the Middle East have delivered the same lesson six times in six years: supply shocks are now a dominant source of macroeconomic variance." lazard.com/news-announcement…
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LeanEconomics github.com/LeanEconomics/Lea… Current: prove existence of stationary general eqm for Aiyagari 1994, plus uniqueness for mu=1 (already known, now Lean formalized). Please feel free to join the Github org and contribute to Econ in Lean. Explain: shorturl.at/vpChP
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Princeton Initiative: Macrofinance 2026 initiative.princeton.edu/pro… Thanks to all attendees Check out Yuliy Sannikov's (with mental map) claude.ai/code/artifact/0d91… (6 models: @idrechs @AlexiSavov @schnabl_econ @ProfArvindKrish He, Garleanu-Panagenous, DiTella, ...)
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Highly relevant! "The Political Economy of Artificial Intelligence," edited by Ajay Agrawal, Joshua Gans, Avi Goldfarb, and Catherine E. Tucker. amzn.to/4AfpuyF "As the effects of artificial intelligence are felt across economies and societies, many of its ramifications are still emerging. This volume brings together economists and political scientists to examine how AI intersects with regulation, military power, and political identity—offering analytical frameworks and identifying key open questions for future research. The contributions address topics such as the allocation of property rights for AI inputs, trade-offs among alternative regulatory regimes, and the role of interest groups in shaping the technology’s trajectory. They explore how AI-related capabilities influence military effectiveness, resource allocation, and bargaining power among nations, and consider AI’s effects on political preferences, from the influence of AI-curated information on polarization to the implications of targeted political advertising and personalized education for national identity formation. The volume highlights key trade-offs that arise in AI’s political economy, and points toward empirical strategies and theoretical models that can advance understanding in this emerging field." amzn.to/4AfpuyF
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Advances in artificial intelligence appear to be driving faster productivity growth, which has important implications for how central banks set interest rates. Together with Gadi Barlevy, @JonasDMFisher, and Will Pennington, we use a theoretical framework to show that if productivity gains are anticipated, monetary policy may need to tighten to prevent overheating, while unanticipated gains could justify lowering rates. Ultimately, the response of monetary policy depends on whether productivity growth is expected or comes as a surprise, highlighting the nuanced relationship between technological progress and monetary policy. chicagofed.org/publications/… #EconX #EconTwitter
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It was an honor to give the Opening Ceremony keynote at @Unibocconi. I have learnt from several Bocconi graduates over the years, including the irreplaceable Alberto Alesina. Thank you to @Unibocconi President SIroni, MD Taranto & Rector Billari for a warm welcome. My speech: unibocconi.it/sites/default/…
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Macron's former Prime Minister, who is candidate at France's next presidential elections, proposes to "build the United States of Europe" 👇 I've been hearing this discourse ever since I was a child, that we cannot compete with the US and China without a strong Europe. Which, granted, makes a lot of sense on paper: if you're to compete against giants, you've got to be a giant yourself. Logical, right? Except, in practice, the exact opposite occurred. Just look at the evolution of relative share of global GDP (visualcapitalist.com/ranked-…): in 1992, the year of the Maastricht treaty (which officially created the EU), the countries making up the EU used to have 28.8% of global GDP which was actually more than the US (25.7%) and China (1.9%) combined! Fast forward to today and both the US and China's shares have grown - in the case of China it's grown considerably - but Europe's share has shrunk to around 17%, the same share as China, losing about 40% of its economic weight in a mere 3 decades. Which means that, very concretely, more Europe - and there has been, treaty after treaty, more and more Europe - has so far meant more and more economic irrelevance. The more we built Europe - this supposed economic giant on paper - the smaller we got economically. And it's not a China story, it's not that simple: if it were, the US's global share of GDP would have shrunk alongside Europe, but it just didn't. Which means it's really a Europe problem. And, unfortunately, it's not just the economy. More Europe has meant more irrelevance and weakness in just about all fields that matter. Take foreign affairs for instance. There used to be a time when Europe's voice mattered in the world - or at least that of the countries making up Europe. When, say, De Gaulle could, in the space of a single year, pull France out of NATO (adst.org/2014/06/france-has-…), ask American troops to leave French soil (humanite.fr/histoire/general…), and then fly to Phnom Penh to tell a packed stadium that the US had no business waging war in Vietnam (en.wikipedia.org/wiki/Phnom_…). Try to picture a single European leader doing even one of those three things today. Heck, in 2009 France got **back** in NATO, a sad illustration that the "strong Europe" we were promised as a counterweight to the US has in practice meant ever deeper subordination to it. It's even written in black and white in the Lisbon Treaty itself (eur-lex.europa.eu/resource.h…), which states that NATO "remains the foundation" of its members' collective defence. So much for the independent giant... Or take another critical dimension of power: technology. The countries of Europe used to sit at the technological frontier: Concorde, Ariane, the TGV, the World Wide Web invented at CERN, etc. A reminder that as late as 2007 a single European company, namely Nokia, sold 4 out of every 10 mobile phones on the planet. Today look at the ASPI Critical Technology Tracker (aspi.org.au/programs/critica…): out of the 74 critical technologies of the future, in how many is any European country in the lead? Answer: not a single one of them. And I'm not even speaking about energy, culture, and a dozen other fields where the story is identical. On energy alone: European companies now pay 2 to 3 times more for their electricity than their American and Chinese competitors, and just last year Brussels pledged to buy $750 billion worth of American energy as part of a trade "deal" for which it received, in exchange, 15% tariffs on its exports. Some giant... Long story short, there is the logic on paper and then there is the logic in practice: when you see that the patient has been getting steadily sicker for 3 decades, and that the doctor's only answer, year after year, is to increase the dose of the very same medicine, at some point you have to question the medicine. Or the doctor. De Gaulle, coming back to him because he was in my view one of the most prescient statesmen we ever produced, saw it coming clear as day: as early as 1962 he warned that a supranational Europe, having dissolved the only entities capable of having a will and a policy of their own - nations - would have no policy at all, and would end up following someone else's. He warned that "there would perhaps be a federator, but he would not be European" (fresques.ina.fr/de-gaulle/fi…). In the same 1962 press conference he also beautifully said that "Dante, Goethe, Chateaubriand belong to all of Europe to the very extent that they were respectively and eminently Italian, German and French. They would not have served Europe much had they been stateless men and had they thought, written in some integrated Esperanto or Volapük." That was his conviction: that Europe's genius is really the sum of its singular geniuses, and that you cannot add them up by melting them down. If you make some sort of soup out of French, Italian, Greek, and Spanish cuisine, all thrown in the same pot, you don't get all the flavors at once. Instead, you've destroyed four of the world's great culinary traditions to produce something no one wants to eat. I'm not anti-European, by the way, and neither was De Gaulle. I do believe - and so did he - that Europe should be a power in its own right. What De Gaulle called a "European Europe": independent of Washington, speaking with its own voice, master of its own destiny. He simply understood that only nations can carry such an ambition, because only nations have a will. Which is the great irony of this whole story: those who claim to want a strong Europe are busy dismantling the only thing that could ever make it one - the sovereignty of nations.
Je propose de bâtir les États-Unis d’Europe.
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It is time to end this war. But Russia’s ruler wants to keep fighting. That is why Ukrainian sanctions against this aggression are working. Last night, our drones covered a distance of about 1,000 kilometers to the St. Petersburg region – to the enemy navy’s arsenals and a base in Kronstadt. Our long-range sanctions also reached about 500 kilometers into the Krasnodar region – and hit an oil depot. These are important results of the joint efforts by warriors from the Armed Forces of Ukraine, the Security Service of Ukraine, and the Defense Intelligence of Ukraine. Russia must end its war and stop its attacks on life. Any manifestation of injustice against Ukraine will receive a just response. I thank our warriors for their precision.
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