Matteo Falagiarda
Economics
- Division
Euro Area External Sector
- Current Position
-
Senior Economist
- Fields of interest
-
Macroeconomics and Monetary Economics,Financial Economics,International Economics
- Education
- 2010-2014
PhD in Economics, University of Bologna, Italy
- 2013
Advanced Studies Program in International Economic Policy Research, Kiel Institute for the World Economy, Germany
- 2010
MSc in International Economic Development, University of Reading, UK
- 2009
MA in European and International Studies, University of Trento, Italy
- 2006
BA in Economics, University of Trento, Italy
- Professional experience
- 2021
Senior Economist, Monetary Analysis Division, European Central Bank
- 2015-2020
Economist, Monetary Analysis Division, European Central Bank
- 2018
Principal Economist, Monetary Analysis Division, European Central Bank
- Teaching experience
- 2023-
Adjunct Professor - Central Banking and Monetary Policy, University of Bologna, Italy
- 10 January 2024
- THE ECB BLOGDetails
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
O51 : Economic Development, Technological Change, and Growth→Economywide Country Studies→U.S., Canada
O11 : Economic Development, Technological Change, and Growth→Economic Development→Macroeconomic Analyses of Economic Development
N24 : Economic History→Financial Markets and Institutions→Europe: 1913?
- 7 March 2023
- THE ECB BLOGDetails
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 12 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- On 1 January 2023 Croatia adopted the euro and became the 20th member of the euro area. The Croatian economy is expected to benefit from the elimination of currency risk, as well as lower transaction and borrowing costs. After its accession to the EU in 2013, Croatia made significant progress in addressing macroeconomic imbalances and achieving convergence towards the euro area. It now needs to continue with those reform efforts in order to fully reap the benefits of the euro and to allow adjustment mechanisms to operate efficiently within the enlarged currency area.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
F15 : International Economics→Trade→Economic Integration
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
- 17 November 2022
- WORKING PAPER SERIES - No. 2752Details
- Abstract
- This paper assesses the role of the housing market in the transmission of conventional and unconventional monetary policy across euro area regions. By exploiting a novel regional dataset on housing-related variables, a structural panel VAR analysis shows that monetary policy propagates effectively to economic activity and house prices, albeit in a heterogeneous fashion across regions. Although the housing channel plays a minor role in the transmission of monetary policy to the economy on average, its importance increases in the case of unconventional monetary policy. We also explore the determinants of the diverse transmission of monetary policy to economic activity across regions, finding a larger impact in areas with lower labour income and more widespread homeownership. An expansionary monetary policy can thus be effective in mitigating regional inequality via its stimulus to the economy.
- JEL Code
- D31 : Microeconomics→Distribution→Personal Income, Wealth, and Their Distributions
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
- 9 November 2021
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 7, 2021Details
- Abstract
- This article reviews the developments in the euro area housing market during the various phases of the coronavirus (COVID-19) pandemic and compares them with previous crises. During the first wave of the COVID-19 pandemic, the introduction of mandatory and voluntary restrictions on economic agents’ mobility had a strong impact on housing market activity. However, in contrast to the global financial crisis and the sovereign debt crisis, the upward trend in house prices and housing loans continued unabated, which was also thanks to resilient demand for housing by households. During the second and third waves, the forceful support of monetary, fiscal and macroprudential policy measures amid more targeted containment measures ensured favourable financing conditions and helped increase the attractiveness of housing for investment purposes, while supply-side bottlenecks may have exerted some upward pressure on house prices. The outlook for the euro area housing market remains dependent on uncertainties related to pandemic developments, policy support and structural changes.
- JEL Code
- E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
- 24 September 2020
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 6, 2020Details
- Abstract
- Firms’ demand for bank loans has been at a record-high level since March 2020 as firms have scrambled to bridge liquidity gaps originating from the COVID-19 shock. To help banks accommodate the surge in loan demand at favourable conditions, most euro area governments have implemented schemes of public guarantees on bank loans. These transfer some of the arising credit risk and eventual credit losses from banks to governments, thereby mitigating the costs for banks. The features of the loan guarantee schemes’ vary across countries as well as their actual use, with higher take-ups being reported in Spain and France, while lower amounts have been taken up in Italy and Germany. Moreover, SMEs in the sectors most affected by the crisis (e.g. trade, tourism, transport) seem to have benefited the most from these programmes. Overall, public loan guarantee schemes have played a key role in supporting corporate lending dynamics since April and preserving favourable lending conditions. The phasing out of these schemes needs to be carefully aligned with corporate financing needs in the months ahead, while their potential side-effects warrant monitoring.
- JEL Code
- E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
H81 : Public Economics→Miscellaneous Issues→Governmental Loans, Loan Guarantees, Credits, Grants, Bailouts
- 30 July 2020
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2020Details
- Abstract
- Qualitative indications from banks on firms’ loan demand and actual loan growth generally correlate with developments in real economic variables. However, during the coronavirus (COVID-19) pandemic, longer-term lending seems to have decoupled from developments in fixed investment. Owing in part to sizeable monetary and fiscal policy support measures, firms’ demand for longer-term loans has increased, while their financing need for fixed investment has declined. By contrast, developments in short-term loans for firms continue to co-move closely with their loan demand for working capital, owing to their acute liquidity needs during the pandemic. Loan demand increased more strongly for small and medium-sized enterprises (SMEs) than for large firms in the second quarter of 2020, benefiting substantially from the policy support measures for bank lending during the pandemic. Developments across economic sectors have been heterogeneous during the pandemic. In the sectors most affected by the crisis, demand for bank loans increased considerably, while value added dropped. The decline in gross value added in the manufacturing sector is particularly relevant in explaining the fall in business investment during the pandemic. While some degree of recovery in investment activity is expected in the second half of 2020, the end of fiscal support schemes in some countries may lead to renewed fears about the creditworthiness of borrowers. Overall, the continuation of a supportive policy environment in the near future will be crucial in preserving favourable financing conditions and facilitating the flow of credit to firms.
- JEL Code
- E2 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 4 February 2020
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 1, 2020Details
- Abstract
- Bank lending to euro area corporates has gradually recovered since 2014, supported by very favourable financing conditions. An assessment of this recovery indicates that it has been broadly in line with economic activity, although loan growth has remained below pre-crisis levels. The moderate pace of the recovery in loan growth mainly reflects the post-crisis deleveraging process and the growing relevance of alternative sources of financing, as well as somewhat weaker economic activity compared with the pre-crisis period. Nevertheless, evidence suggests that bank lending to non-financial corporations has supported firms’ business investment. The strength of the relationship between business investment and bank lending to corporates has, however, differed across euro area countries. Qualitative and quantitative evidence shows that the recovery in bank lending to corporates has received strong support from the ECB’s non-standard monetary policy measures.
- JEL Code
- E4 : Macroeconomics and Monetary Economics→Money and Interest Rates
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 29 April 2019
- WORKING PAPER SERIES - No. 2274Details
- Abstract
- This paper investigates the behaviour of credit rating agencies (CRAs) using a natural experiment in monetary policy. Specifically, we exploit the corporate QE of the Eurosystem and its rating-based specific design which generates exogenous variation in the probability for a bond of becoming eligible for outright purchases. We show that after the launch of the policy, rating upgrades were mostly noticeable for bonds initially located below, but close to, the eligibility frontier. In line with the theory, rating activity is concentrated precisely on the territory where the incentives of market participants are expected to be more sensitive to the policy design. Complementing the evidence on the effectiveness of non-standard measures, our findings contribute to better assessing the consequences of the explicit (but not exclusive) reliance on CRAs ratings by central banks when designing monetary policy.
- JEL Code
- E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
G30 : Financial Economics→Corporate Finance and Governance→General
- 7 December 2018
- WORKING PAPER SERIES - No. 2211Details
- Abstract
- We propose a method to decompose net lending flows into loan origination and repayments. We show that a boom in loan origination is transmitted to repayments with a very long lag, depressing the growth rate of the stock for many periods. In the euro area, repayments of the mortgage loans granted in the boom preceding the financial crisis have been dragging down net loan growth in recent years. This concealed an increasing dynamism in loan origination, especially during the last wave of ECB’s non-standard measures. Using loan origination instead of net loans has important implications for understanding macroeconomic developments. For instance, the robust developments in loan origination in recent times explain the strengthening in housing markets better than net loans. Moreover, credit supply restrictions during the crisis are estimated to be smaller. Overall, there is a premium on using loan origination and repayments in economic models, especially after large booms.
- JEL Code
- E17 : Macroeconomics and Monetary Economics→General Aggregative Models→Forecasting and Simulation: Models and Applications
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G01 : Financial Economics→General→Financial Crises
D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance
- 9 August 2018
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2018Details
- Abstract
- Loans to households for house purchase appear to have grown at a moderate rate in recent years, despite very favourable financing conditions, the recovery in economic activity and dynamic housing markets. The annual growth rate of adjusted loans to households for house purchase was 2.8% in the first quarter of 2018, having increased gradually from slightly above 0% in 2014. However, when assessing loan developments, it should be noted that loan growth figures are usually reported in net terms, i.e. newly originated loans and the repayments of previously granted loans are considered together because statistics on balance sheet items are derived from stock figures. Given the long-term nature of mortgage contracts, loan repayments have a long-lasting impact on net figures, especially after a boom, and thus obfuscate the prevailing lending dynamics. Against this background, this box presents the results of a simulated portfolio approach which decomposes net lending flows into loan origination and the repayments of previously granted outstanding loans. Examining these two components separately provides a better view of current loan developments.
- JEL Code
- E17 : Macroeconomics and Monetary Economics→General Aggregative Models→Forecasting and Simulation: Models and Applications
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G01 : Financial Economics→General→Financial Crises
D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance
- 6 February 2017
- WORKING PAPER SERIES - No. 2015Details
- Abstract
- This paper sheds new light on the information content of monetary and credit aggregates for future price developments in the euro area. Overall, we find strong variation in the information content of these variables over time. We show that monetary and credit aggregates are very often selected among the top predictors of inflation, with their predictive power relative to other predictors generally improving in the post-2012 period. An out-of-sample forecasting exercise indicates that, when monetary and credit aggregates are loaded directly in the forecasting equation, the additional gains over the benchmark model are generally high and significant across horizons and HICP components only in the most recent period. When the forecasts are computed using factor-augmented regressions based on the best predictors, we confirm the importance of monetary and credit variables in forecasting inflation, even if their information content is diluted in a much broader pool of variables.
- JEL Code
- C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
E41 : Macroeconomics and Monetary Economics→Money and Interest Rates→Demand for Money
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 25 November 2015
- WORKING PAPER SERIES - No. 1869Details
- Abstract
- Using event-study techniques we investigate the presence and the magnitude of spillovers from the ECB
- JEL Code
- C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 25 August 2015
- WORKING PAPER SERIES - No. 1844Details
- Abstract
- Using a novel dataset on changes in capital controls and currency-based prudential measures in 17 major emerging market economies (EMEs) over the period 2001-2011, this paper provides new evidence on domestic and multilateral (or spillover) effects of capital controls before and after the global financial crisis. Our results, based on panel VARs, suggest that capital control actions do not allow countries to avoid the trade-offs of the monetary policy trilemma. Where they have a desired impact on the trilemma variables
- JEL Code
- F41 : International Economics→Macroeconomic Aspects of International Trade and Finance→Open Economy Macroeconomics
F42 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Policy Coordination and Transmission
F32 : International Economics→International Finance→Current Account Adjustment, Short-Term Capital Movements
- 22 April 2015
- WORKING PAPER SERIES - No. 1782Details
- Abstract
- This paper attempts to evaluate the impact of fiscal policy announcements by the Italian government on the long-term sovereign bond spread of Italy relative to Germany. After collecting data on relevant fiscal policy announcements, we perform an econometric comparative analysis between the three administrations that followed one another during the period 2009-2013. The results indicate that only fiscal policy announcements made by members of Monti's cabinet had a significant impact on the Italian spread. We argue that these findings may be partly explained by a credibility gap between Monti's technocratic administration and Berlusconi's and Letta's governments.
- JEL Code
- E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
G01 : Financial Economics→General→Financial Crises
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
- 13 August 2014
- WORKING PAPER SERIES - No. 1714Details
- Abstract
- This paper aims to shed light on the role of credit supply shocks in euro area countries during the recent pre-crisis, bust, and post-crisis periods. A time-varying parameter vector autoregression (TVP-VAR) with stochastic volatility
- JEL Code
- C11 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Bayesian Analysis: General
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
- 2024
- European Economic Review
- 2023
- International Review of Financial Analysis
- 2022
- Swiss Finance Institute Research Paper
- 2021
- European Economy - Banks, Regulation, and the Real Sector
- 2020
- Journal of Economics and Statistics
- 2018
- Journal of International Economics
- 2017
- International Review of Economics & Finance
- 2015
- European Journal of Political Economy
- 2015
- Journal of International Money and Finance
- 2015
- Journal of International Money and Finance
- 2014
- International Journal of Monetary Economics and Finance
- 2009
- Rivista di Politica Economica