@article{cacciatore_duval_fiori_ghironi_2021, title={Market Reforms at the Zero Lower Bound}, volume={53}, ISSN={["1538-4616"]}, DOI={10.1111/jmcb.12773}, abstractNote={Abstract This paper studies the impact of product and labor market reforms when the economy faces major slack and a binding constraint on monetary policy easing—such as the zero lower bound (ZLB). To this end, we build a model with endogenous producer entry, labor market frictions, and nominal rigidities. We find that while the effect of market reforms depends on the cyclical conditions under which they are implemented, the ZLB itself does not appear to matter. In fact, when carried out in a recession, the impact of reforms is typically stronger when the ZLB is binding. The reason is that reforms are inflationary in our structural model (or they have no noticeable deflationary effects). Thus, contrary to the implications of reduced‐form modeling of product and labor market reforms as exogenous reductions in price and wage markups, our analysis shows that there is no simple across‐the‐board relationship between market reforms and the behavior of real marginal costs. This significantly alters the consequences of the zero (or any effective) lower bound on policy rates.}, number={4}, journal={JOURNAL OF MONEY CREDIT AND BANKING}, author={Cacciatore, Matteo and Duval, Romain and Fiori, Giuseppe and Ghironi, Fabio}, year={2021}, month={Jun}, pages={745–777} }
 @article{cacciatore_fiori_traum_2020, title={Hours and employment over the business cycle: A structural analysis}, volume={35}, ISSN={["1096-6099"]}, DOI={10.1016/j.red.2019.07.001}, abstractNote={We conduct Bayesian inference on a quantitative business-cycle model with search-and-matching frictions and a neoclassical hours-supply decision. Likelihood maximization with both U.S. macroeconomic and labor data shows the model cannot jointly reproduce the comovement of the labor margins with themselves and with macro data. A parsimonious set of features reconciles the model with the data: non-separable preferences with parametrized wealth effects and costly hours adjustment. The model offers a structural explanation for the observed time-varying comovement between the labor margins, being either positive or negative, across post-war U.S. recessions and recoveries. Moreover, the estimated model shows adjustment in the intensive margin contributes up to half the dynamics of total hours in these episodes, as intensive-margin adjustments increase employment losses during recessions and delay employment recoveries.}, journal={REVIEW OF ECONOMIC DYNAMICS}, author={Cacciatore, Matteo and Fiori, Giuseppe and Traum, Nora}, year={2020}, month={Jan}, pages={240–262} }
 @article{ferraro_fiori_2020, title={The Aging of the Baby Boomers: Demographics and Propagation of Tax Shocks}, volume={12}, ISSN={["1945-7715"]}, DOI={10.1257/mac.20160419}, abstractNote={We study how the changing demographic composition of the US labor force has affected the response of the unemployment rate to marginal tax rate shocks. Using narratively identified tax changes as proxies for structural shocks, we establish that the responsiveness of the unemployment rates to tax changes varies significantly across age groups: the unemployment rate response of the young is nearly twice as large as that of the old. This heterogeneity is the channel through which shifts in the age composition of the labor force impact the response of the unemployment rate to tax cuts. We find that the aging of the baby boomers considerably reduces the effects of tax cuts on aggregate unemployment. (JEL E24, E62, H24, H31, J21)}, number={2}, journal={AMERICAN ECONOMIC JOURNAL-MACROECONOMICS}, author={Ferraro, Domenico and Fiori, Giuseppe}, year={2020}, month={Apr}, pages={167–193} }
 @article{cacciatore_fiori_ghironi_2016, title={Market deregulation and optimal monetary policy in a monetary union}, volume={99}, ISSN={["1873-0353"]}, DOI={10.1016/j.jinteco.2015.11.002}, abstractNote={This paper addresses the consequences of product and labor market deregulation for monetary policy in a two-country monetary union with endogenous product creation and labor market frictions. We show that when regulation is high in both countries, optimal policy requires significant departures from price stability both in the long run and over the business cycle. The adjustment to market reform requires expansionary policy to reduce transition costs, but deregulation reduces static and dynamic inefficiencies, making price stability more desirable once the transition is complete. International synchronization of reforms can eliminate policy tradeoffs generated by asymmetric deregulation.}, journal={JOURNAL OF INTERNATIONAL ECONOMICS}, author={Cacciatore, Matteo and Fiori, Giuseppe and Ghironi, Fabio}, year={2016}, month={Mar}, pages={120–137} }
 @article{cacciatore_duval_fiori_ghironi_2016, title={Market reforms in the time of imbalance}, volume={72}, ISSN={["1879-1743"]}, DOI={10.1016/j.jedc.2016.03.008}, abstractNote={Abstract We study the consequences of product and labor market reforms in a two-country model with endogenous producer entry and labor market frictions. We focus on the role of business cycle conditions and external constraints at the time of reform implementation (or of a credible commitment to it) in shaping the dynamic effects of such policies. Product market reform is modeled as a reduction in entry costs and takes place in a non-traded sector that produces services used as input in manufacturing production. Labor market reform is modeled as a reduction in firing costs and/or unemployment benefits. We find that business cycle conditions at the time of deregulation significantly affect adjustment. A reduction of firing costs entails larger and more persistent adverse short-run effects on employment and output when implemented in a recession. By contrast, a reduction in unemployment benefits boosts employment and output by more in a recession compared to normal times. The impact of product market reforms is less sensitive to business cycle conditions. Credible announcements about future reforms induce sizable short-run dynamics, regardless of whether the announcement takes place in normal times or during an economic downturn. Whether the immediate effect is expansionary or contractionary varies across reforms. Finally, lack of access to international lending in the wake of reform can amplify the costs of adjustment.}, journal={JOURNAL OF ECONOMIC DYNAMICS & CONTROL}, author={Cacciatore, Matteo and Duval, Romain and Fiori, Giuseppe and Ghironi, Fabio}, year={2016}, month={Nov}, pages={69–93} }
 @article{cacciatore_duval_fiori_ghironi_2016, title={Short-term pain for long-term gain: Market deregulation and monetary policy in small open economies}, volume={68}, ISSN={0261-5606}, url={http://dx.doi.org/10.1016/J.JIMONFIN.2016.02.010}, DOI={10.1016/J.JIMONFIN.2016.02.010}, abstractNote={Abstract This paper explores the effects of labor and product market reforms in a New Keynesian, small open economy model with labor market frictions and endogenous producer entry. We show that it takes time for reforms to pay off, typically at least a couple of years. This is partly because the benefits materialize through firm entry and increased hiring, both of which are gradual processes, while any reform-driven layoffs are immediate. Some reforms – such as reductions in employment protection – increase unemployment temporarily. Implementing a broad package of labor and product market reforms minimizes transition costs. Importantly, reforms do not have noticeable deflationary effects, suggesting that the inability of monetary policy to deliver large interest rate cuts in their aftermath – either because of the zero bound on policy rates or because of the membership in a monetary union – may not be a relevant obstacle to reform. Alternative simple monetary policy rules do not have a large effect on transition costs.}, journal={Journal of International Money and Finance}, publisher={Elsevier BV}, author={Cacciatore, Matteo and Duval, Romain and Fiori, Giuseppe and Ghironi, Fabio}, year={2016}, month={Nov}, pages={358–385} }
 @article{cacciatore_fiori_2016, title={The macroeconomic effects of goods and labor markets deregulation}, volume={20}, ISSN={["1096-6099"]}, DOI={10.1016/j.red.2015.10.002}, abstractNote={Abstract We study the macroeconomic effects of deregulating the goods and labor markets. To this end, we introduce endogenous product creation and labor market frictions in an otherwise-standard real business cycle model. Regulation affects producer entry costs, firing restrictions, and unemployment benefits. We find that reforms can have short-run recessionary effects, despite being expansionary in the long run. Estimates from a panel VAR for OECD countries provide empirical support for this result. Moreover, market deregulation has sizable effects on the efficiency of business cycle fluctuations. Increased flexibility in both goods and labor markets lowers the level and volatility of the inefficiency wedges that distort agents' equilibrium decisions, leading to a substantial reduction in the welfare cost of business cycles. Nevertheless, individual reforms produce contrasting effects.}, journal={REVIEW OF ECONOMIC DYNAMICS}, author={Cacciatore, Matteo and Fiori, Giuseppe}, year={2016}, month={Apr}, pages={1–24} }
 @misc{cacciatore_fiori_2015, title={The Macroeconomics of Market Regulation}, volume={18}, ISSN={["1468-2362"]}, DOI={10.1111/infi.12077}, abstractNote={International FinanceVolume 18, Issue 3 p. 343-360 Book Review The Macroeconomics of Market Regulation Matteo Cacciatore, Corresponding Author Matteo Cacciatore HEC Montréal Matteo Cacciatore HEC Montréal 3000, chemin de la Côte-Sainte-Catherine Montréal (Québec) Canada H3T 2A7 matteo.cacciatore@hec.ca Giuseppe Fiori North Carolina State University 2801 Founders Drive 4102 Nelson Hall Raleigh, NC 27695 USA gfiori@ncsu.eduSearch for more papers by this authorGiuseppe Fiori, Corresponding Author Giuseppe Fiori North Carolina State University Matteo Cacciatore HEC Montréal 3000, chemin de la Côte-Sainte-Catherine Montréal (Québec) Canada H3T 2A7 matteo.cacciatore@hec.ca Giuseppe Fiori North Carolina State University 2801 Founders Drive 4102 Nelson Hall Raleigh, NC 27695 USA gfiori@ncsu.eduSearch for more papers by this author Matteo Cacciatore, Corresponding Author Matteo Cacciatore HEC Montréal Matteo Cacciatore HEC Montréal 3000, chemin de la Côte-Sainte-Catherine Montréal (Québec) Canada H3T 2A7 matteo.cacciatore@hec.ca Giuseppe Fiori North Carolina State University 2801 Founders Drive 4102 Nelson Hall Raleigh, NC 27695 USA gfiori@ncsu.eduSearch for more papers by this authorGiuseppe Fiori, Corresponding Author Giuseppe Fiori North Carolina State University Matteo Cacciatore HEC Montréal 3000, chemin de la Côte-Sainte-Catherine Montréal (Québec) Canada H3T 2A7 matteo.cacciatore@hec.ca Giuseppe Fiori North Carolina State University 2801 Founders Drive 4102 Nelson Hall Raleigh, NC 27695 USA gfiori@ncsu.eduSearch for more papers by this author First published: 17 December 2015 https://doi.org/10.1111/infi.12077Citations: 2Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume18, Issue3Winter 2015Pages 343-360 RelatedInformation}, number={3}, journal={INTERNATIONAL FINANCE}, author={Cacciatore, Matteo and Fiori, Giuseppe}, year={2015}, pages={343–360} }
 @article{cacciatore_fiori_ghironi_2015, title={The domestic and international effects of euro area market reforms}, volume={69}, ISSN={1090-9443}, url={http://dx.doi.org/10.1016/J.RIE.2015.09.002}, DOI={10.1016/J.RIE.2015.09.002}, abstractNote={Abstract What will be the internal and external effects of euro area market reforms? Will increased market flexibility in Europe affect incentives for the conduct of macroeconomic policy by European policymakers and their partners? We address these questions in a two-country model with heterogeneous plants, endogenous producer entry, and labor market frictions. We interpret the two countries in our model as the euro area and the U.S. We find that market reforms in the euro area will result in increased producer entry and lower unemployment on both sides of the Atlantic, but a worse European external balance, at least for some time. With high market regulation in the euro area, optimal monetary policy requires significant departures from price stability both in the long run and over the business cycle, and a higher inflation target in the euro area than in the U.S. The adjustment to market reforms requires expansionary monetary policy, and more expansion in reforming Europe than in the already flexible U.S. However, deregulation reduces static and dynamic inefficiencies, making price stability more desirable everywhere once the transition is complete.}, number={4}, journal={Research in Economics}, publisher={Elsevier BV}, author={Cacciatore, Matteo and Fiori, Giuseppe and Ghironi, Fabio}, year={2015}, month={Dec}, pages={555–581} }
 @article{fiori_2012, title={Lumpiness, capital adjustment costs and investment dynamics}, volume={59}, ISSN={0304-3932}, url={http://dx.doi.org/10.1016/j.jmoneco.2012.03.005}, DOI={10.1016/j.jmoneco.2012.03.005}, abstractNote={Aggregate investment in the US economy displays a hump-shaped pattern in response to shocks, and the autocorrelation of aggregate investment growth is positive for the first few quarters, turning negative for the later quarters. This paper shows that this feature of the data is the natural outcome of a two-sector consumption/investment model designed and calibrated to reproduce plant-level evidence on capital accumulation.}, number={4}, journal={Journal of Monetary Economics}, publisher={Elsevier BV}, author={Fiori, Giuseppe}, year={2012}, month={May}, pages={381–392} }