Giovanni Di Bartolomeo

Giovanni Di Bartolomeo
Sapienza University of Rome | la sapienza · Department of Economics and Law

PhD

About

175
Publications
18,107
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Citations
Introduction
Giovanni Di Bartolomeo currently works at the Department of Economics and Law, Sapienza University of Rome. Giovanni does research in Macroeconomics and Behavioural Economics.
Additional affiliations
November 2005 - November 2012
Università degli Studi di Teramo
Position
  • Professor (Associate)
November 2002 - November 2005
Sapienza University of Rome
Position
  • Senior Researcher
September 2000 - July 2002
University of Antwerp
Position
  • Research Assistant

Publications

Publications (175)
Article
In response to the Covid‐19 crisis, the European Central Bank (ECB) has relaunched a massive asset purchase programme within its combined‐arms monetary strategy. This paper surveys and discusses the theory and the evidence of the central bank's unconventional monetary tools for the euro area. It analyses the role of the asset purchase programmes in...
Article
The COVID-19 pandemic is an unprecedented worldwide event with a massive impact on the economic system. The first Western country that had to face the COVID-19 crisis was Italy, which therefore represents a natural “case study.” By using the microdata and granular policy information available at the Italian Ministry of Economy and Finance, this pap...
Article
Full-text available
This paper uses an event-based analysis to describe how the European Central Bank’s (ECB’s) policy responses to the pandemic crisis have affected the European financial and economic system. The result of our exercise, which is based on the examination of the main measures taken by the ECB during 2020, is that these responses have positively affecte...
Article
Governments attempt to provide the energy sector with incentives to replace old technologies with new ones based on renewable energy as the most effective way to combat climate change. Yet in the energy sector prevail fossil fuel incumbents that might inhibit renewable energy entrants. Our paper provides a game-theoretic stylization of competition...
Article
Our paper aims to analyze Mario Draghi’s famous statement, the “whatever it takes,” as a mechanism that preserves the common good of financial stability and facilitates debt control in the peripheral countries. Although we consider decentralized fiscal policies, a more conservative policy stance is achieved under “whatever it takes” than under an i...
Article
Full-text available
Our paper aims at introducing a moving-horizon interaction in a strategic context. We assume that, in each instant of time, players can predict the effects of their actions and those of their opponents on a finite moving horizon. We define an equilibrium concept, which is consistent in this setting, and develop an appropriate algorithm to compute i...
Chapter
We study the dynamic problem of pollution control enacted by some policy of regulation and mitigation. The dynamics of the transition from one level of regulation and mitigation to another usually involves inter-temporal trade-offs. We focus on how different policymaker’s time horizons affect these trade-offs. We refer to shorter lengths in policym...
Research
Full-text available
The COVID-19 pandemic shocks are a significant source of uncertainty in several aspects. In particular, these shocks influence the landscape, in which policymakers operates, and create further uncertainty about policy decisions and about their effectiveness. The aim of this paper is to offer some relative measures of the uncertainty caused by the p...
Article
Full-text available
In this paper we aim to disentangle the effects on in-group favoritism driven by beliefs from those stemming from group identity, with the final goal of testing the relative power of three potential explanations of this bias: The Beliefs Driven Explanation (BDE), the Group Identity Explanation (GIE) and the Belief-mediated Group Identity Explanatio...
Research
Full-text available
In response to the COVID-19 crisis, the ECB has relaunched a massive asset purchase programme within its combined-arms monetary strategy. This paper presents and discusses the theory and the evidence of the central bank's asset purchases, mainly in the euro area. It analyses the role of asset purchase programmes in the ECB's toolkit and the potenti...
Article
We augmented a macro-model with intrinsic-inflation inertia assuming that prices farer in the past are more likely to be reset. We estimated the model for seven industrialized economies to compare their price/wage structures and to explore the potential nexus between changes the price/wage structure and changes in policy stances. We find evidence f...
Article
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By using Bayesian techniques, our paper investigates behavioral New-Keynesian DSGE models derived under two parsimonious alternatives to introduce heterogeneous expectations: the Euler equation and the anticipated-utility approach. First, we explore the relation between the expectation formation processes and the model determinacy for a broad range...
Research Proposal
Full-text available
Building on Christoph Vanberg's classic partner-switching mechanism, we experimentally test two theories that posit different reasons why promises breed trust and cooperation. The expectation-based explanation (EBE) operates via belief-dependent guilt aversion, while the commitment-based explanation (CBE) suggests that promises offer commitment pow...
Article
This paper aims at identifying the main drivers of the Italian economic cycle. To this end, we estimate a small-open economy model based on a dual labor market, which captures the main features of the Italian economy. Our results indicate that labor market rigidities are important structural features of the Italian economy, but they provide a limit...
Article
The Publisher regrets that this article is an accidental duplication of an article that has already been published, https://doi.org/10.1016/j.jpolmod.2019.07.007. The duplicate article has therefore been withdrawn. The full Elsevier Policy on Article Withdrawal can be found at https://www.elsevier.com/about/our-business/policies/article-withdrawal.
Article
What advice can be given to the policymaker to reduce the burden of public debt after a crisis? In this situation, the debt consolidation calls for fiscal surplus based on increases in taxes and/or reductions in public spending. This paper aims at answering to the above question. Specifically, it evaluates different policy options on the table usin...
Article
We study the extent to which the belief-formation process affects the dynamics of macroeconomic variables when the central bank uses forward guidance. Recent literature has emphasized two kinds of puzzle associated to forward guidance. First, standard sticky-price models imply that far future forward guidance has huge and implausible effects on cur...
Article
This special issue, “Macroeconomics, rationality, and institutions,” explores the role of institutions in macro models in which agents have limited rationality or interact strategically. We aim to contribute to the refinements and developments of the macro-models along several directions: The analyses of financial frictions, learning processes and...
Article
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We theoretically formulate the idea that if a person stays silent in a situation where a promise could have been made, then he or she will subsequently act as if having a license to be selfish. We then report results from an experimental test that provides some support.
Article
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To varying degrees, empirical evidence shows that non-binding messages (cheap talk) are effective in enhancing cooperative behaviors when simple games are augmented with a communication pre-stage. We focus on games where the interactions are more complex and test the effect of communication. Specifically, we consider an investment game, where playe...
Article
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Policymakers are stuck in time. Political short-termism, policy myopia, policy short-sightedness, and similar words have been coined to emphasize the present-centric policy thinking. Politics tends to produce short time horizons, and as a result, policymakers often fail to use present opportunities to mitigate future harms. Focusing on fiscal and m...
Article
Full-text available
Why do people keep their promises? Vanberg (2008) and Ederer and Stremitzer (2017) provide causal evidence in favor of, respectively, an intrinsic preference for keeping one's word and Charness and Dufwenberg's (2006) expectations-based account based on guilt aversion. The overall picture is incomplete though, as no study disentangles effects in a...
Article
Full-text available
Why do people keep their promises? Vanberg (2008) and Ederer & Stremitzer (2016) provide causal evidence in favor of, respectively, an intrinsic preference for keeping one’s word and an expectations-based account (suggested by Charness & Dufwenberg 2006) based on guilt aversion. The overall picture is incomplete though, as no study disentangles eff...
Article
Full-text available
Our paper aims to analyze the effectiveness of different risk-sharing mechanisms in providing stability to a monetary union. We select two stylized tools with extreme and opposite features. The first is an expansionary but conventional monetary policy that is used to help EMU’s most fragile member states manage their public debts; the second is a c...
Article
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We derive and estimate a New Keynesian wage Phillips curve that accounts for intrinsic inertia. In line with microevidence on wage setting, we consider a wage-setting model featuring an upward-sloping hazard function, based on the notion that the probability of resetting a wage depends on the time elapsed since the last reset. Our wage Phillips cur...
Article
This paper builds a stylized simple sticky-price New Keynesian model where agents' beliefs are not homogeneous. We assume that agents choose optimal plans while considering forecasts of macroeconomic conditions over an infinite horizon. A fraction of them (boundedly rational agents) use heuristics to forecast macroeconomic variables over an infinit...
Article
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Our paper investigates the underlying motivations of social interactions. By using a qualitative approach, we discuss the relevance of conditional (trust and reciprocity) and unconditional (altruism and inequality-aversion) motivations in investment games. Specifically, self-reported questionnaires and free subjects’ comments are used to discuss th...
Article
The events driven by the financial crisis have highlighted limits and drawbacks of current paradigms. Economists began to rethink the role and impacts of financial factors and standard policies. At the same time, a more general sentiment of revision has challenged several consolidated “dogmas.” Accordingly, this special issue of Macroeconomic Dynam...
Article
Full-text available
In a world where expectations are heterogeneous, what is the design of the optimal policy? Are canonical policies robust when heterogeneous expectations are considered or would they be associated with large welfare losses? We aim to answer these questions in a stylized simple New Keynesian model where agents' beliefs are not homogeneous. Assuming t...
Article
Full-text available
This paper reconsiders optimal inflation targeting in a model where persistence is generated by rational choices of the price makers because of a time-dependent pricing mechanism. In this framework, which generalizes the traditional Calvo model, inflation persistence is intrinsic, as it is micro-founded assuming that firms' pricing decisions depend...
Article
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This paper analyzes the effects of policy uncertainty on the stability of a monetary union. Focusing on peripheral countries, we study how uncertainty over the consequences of a possible exit affects regime switches. Applying game theory and a cost-benefit analysis, we model a regime switch as the endogenous result of a two-stage policy game. We fi...
Book
The recent financial crisis has demonstrated the dangers of ignoring the factors that led to previous crises, and the effectiveness of the policies designed to deal with them. Over time, these macroeconomic policies have evolved, oscillating between state intervention and a free-market approach. Following a story that runs from the pre-Great Depres...
Article
This study aims to examine some ‘circumstances’ that may influence trust formation and, in general, pro-social behaviours in game situations characterized by complex strategies, that is, not dichotomous choices. We consider the potential role played by one-way communication (cheap talk), social history, and ‘climate effects’ induced by meditation i...
Book
The recent economic events driven by the great financial crisis of 2007-08 has challenged some “dogma”, highlighting various limits and drawbacks of current paradigms. The crisis showed the limitations of monetary policy and led to a revaluation of what levels of public debt can be considered safe. This volume aims to refresh the debate on some imp...
Article
The Italian insurance market represents a peculiar and puzzling case within the European Single Market. Since the radical deregulation process in 1992, standard indicators have shown a low degree of market concentration. However, at the same time, Italian insurance costs still remain among the highest in Europe due to the existence of widespread co...
Article
This paper applies game theory and a cost-benefit analysis to study voluntary exits and contagion effects in countries joined to a monetary union. The paper looks at two non-core or periphery countries of a large union and examines the role of structural asymmetries and strategic interactions as determinants of equilibrium outcomes, following both...
Article
This study aims to examine some ‘circumstances’ that may influence trust formation and, in general, pro-social behaviours in game situations characterized by complex strategies, i.e. not binomial choices. We consider the potential role played by one-way communication (cheap talk), social history, and ‘climate effects’ induced by meditation in a sin...
Article
Our paper reconsiders the triadic design proposed by Cox (Games and Economic Behavior 46:260–281, 2004) to identify trust and reciprocity in investment games. Specifically, we extend the design in two directions. First, we collect information on investors’ choices by using both the direct-response (as does Cox) and strategy methods. Using the latte...
Article
By viewing trade unions as economic units analogous to firms, which can be studied by applying the standard tools of microeconomic analysis, this article aims to derive the optimal degree of union centralization in a multi-unions simple general equilibrium model. Differently from previous literature, we show that if the degree of centralization amo...
Article
This paper analyzes strategic interactions and contagion effects in the peripheral countries of a monetary union. Using game theory and cost-benefit analysis, the paper determines the set of equilibrium solutions under which country-specific shocks are transmitted to other member countries giving rise to contagion. Numerical simulations, obtained b...
Article
Full-text available
This paper offers a reinterpretation of the Fed's time-varying implicit inflation target, based on two considerations. The first is that the need to alleviate the burden of distortionary taxation may justify the choice of a positive inflation rate. The second is based on compelling evidence that the degree of price and wage indexation falls with tr...
Article
Full-text available
Ghana is poised to be one of the fastest growing economies in Sub-Saharan Africa because of its emerging oil and gas industry. Ghana's discovery of oil in commercial quantities in 2007 and its commencement of production in 2010 are expected to have an impact on the economy. To investigate these, we estimated a dynamic stochastic general equilibrium...
Article
Full-text available
Ghana is poised to be one of the fastest growing economies in Sub-Saharan Africa because of its emerging oil and gas industry. Ghana’s discovery of oil in commercial quantities in 2007 and its commencement of production in 2010 are expected to have an impact on the economy. To investigate these, we estimated a dynamic stochastic general equilibrium...
Article
Full-text available
We address the coordination failures that arise in models with multiple equilibria and study how they may be resolved by reconsidering the role of cheap talk communication as an equilibrium selection device. We introduce an outside option (representing common-knowledge expected outcomes in the absence of coordination), and show that a player may be...
Data
Full-text available
In this paper we use a standard multi-union, monopolistic competition model to investigate the qualitative and quantitative responses of inflation and unemployment to monetary policy activism under different institutional arrangements in the labor market, which are defined by the rigidity of nominal wages. We show that the effects of monetary polic...
Book
Developing a new and highly innovative theory of economic policy, this book deals with conflicts between strategic actions by public and private agents. It builds on the Lucas critique but also applies the tools introduced by Tinbergen and Theil to dynamic policy games and from there derives a new theory of economic policy. Its main propositions de...
Article
We challenge the widely held belief that New-Keynesian models cannot predict optimal positive inflation rates. In fact these are justified by the Phelps argument that monetary financing can alleviate the burden of distortionary taxation. We obtain this result because, in contrast with previous contributions, our model accounts for public transfers...
Article
Empirical contributions show that wage re-negotiations take place while expiring contracts are still in place. This is captured by assuming that nominal wages are pre-determined. As a consequence, wage setters act as Stackelberg leaders, whereas in the typical New Keynesian model the wage-setting rule implies that they play a Nash game. We present...
Article
The paper shows that a monetary policy regime that allows for a positive inflation rate disciplines monopolistic wages setters if these, when setting contracts, internalize the consequences of their choices for economic outcomes over the life of the contract. We also show that discretionary monetary policy has real effects when wage setters are non...
Article
Full-text available
The main aim of this article is to investigate the sources of money non-neutrality in policy games involving one or more trade unions in simple analytical settings. We show that there are common roots in the non-neutrality results so far obtained in apparently different contexts.
Article
Rational expectations are often used as an argument against policy activism, as they may undermine or neutralize the policymaker’s actions. Although this sometimes happens, rational expectations do not always imply policy invariance or ineffectiveness. In fact, in certain circumstances rational expectations can enhance our power to control an eco...
Article
Economic theory does not have a formal model of how announcements of future policies affect economic performance, or how they could be used to manage expectations. In this paper, we show that, in general, the controllability conditions stated by Tinbergen continue to hold under rational expectations. In fact, we find that when they are satisfied, t...
Article
Full-text available
The article traces a profile of the working poor, or people who despite being employed, they perceive a low income, usually inadequate to the needs of maintaining him/her and his/her family members. Using a logistic regression model, the article assess the impact of the main determinants of the phenomenon.
Article
We study the relationship between equilibrium existence and uniqueness in LQ-games, and the classical theory of economic policy. By focusing on system controllability, we find necessary conditions for the existence and uniqueness of the Nash equilibrium that generalize results in the existing literature.
Article
Despite the increasing number of studies on monetary policy uncertainty, its role on the strategic interaction between fiscal and monetary policies has not been fully explored. Our paper aims to fill this gap by evaluating the consequences produced by multiplicative uncertainty in such a context.
Article
Full-text available
We challenge the widely held belief that New Keynesian models cannot predict an optimal positive inflation rate. In fact we find that even for the US economy, characterized by relatively small government size, optimal trend inflation is justified by the Phelps argument that the inflation tax should be part of an optimal (distortionary) taxation sch...
Article
Full-text available
The theory of economic policy has its roots in the contributions of Tinbergen and Theil, who solved the problem of a policymaker aiming to achieve certain values for his policy targets, or to minimize a loss function defined on those targets, by using the available policy instruments. After Lucas raised the issue that the private sector could react...
Article
Full-text available
Questo lavoro si propone di distinguere le differenti motivazioni che si trovano alla base delle scelte effettuate in un gioco dell’investimento. In particolare attraverso metodi diretti, basati sull’osservazione dei playoff e delle scelte, e indiretti, basati su questionari, si vogliono distinguere le motivazioni legate a preferenze sociali condiz...
Article
Recent developments in macroeconomics resurrect the view that welfare costs of inflation arise because the latter acts as a tax on money balances. Empirical contributions show that wage re-negotiations take place while expiring contracts are still in place. Bringing these seemingly unrelated aspects together in a stylized general equilibrium model,...
Article
By applying the new theory of economic policy to the provision of public goods, new and interesting issues emerge. On the one hand, such well-known results as, e.g., the inefficiency of decentralized equilibria can be reinterpreted in the light of the new approach; on the other hand, new issues of coordination arise. A conflict of interest among th...
Article
This paper studies corporatism as the outcome of bargaining between the government and a representative labor union. We show that if negotiations between these two parties only relate to macroeconomic policies and unions are not assumed to be inflation-averse, corporatism can never be beneficial to both parties. As corporatist policies are neverthe...
Article
Full-text available
Recent developments in macroeconomics resurrect the view that welfare costs of inflation arise because the latter acts as a tax on money balances. Empirical contributions show that wage re-negotiations take place while expiring contracts are still in place. Bringing these seemingly unrelated aspects together in a stylized general equilibrium model,...
Conference Paper
The paper studies the relationship between equilibrium existence in LQ games and the classical theory of economic policy, providing the framework to generalize some recent results. By focusing on system control-ability, instead of the controllability by one or some of the players, we find conditions for the existence of the Nash equilibrium that ex...
Article
Search-theoretic models of monetary exchange resurrect the view that welfare costs of in‡ation arise because the latter acts as a tax on money balances. In contrast with standard Calvo pricing models, empirical work on institutional features of the labor market shows that wage negotiations take place while expiring contracts are still in place, imp...
Article
This paper shows the relationship between static controllability (well-known as Tinbergen’s golden rule) and the existence and other properties of the Nash equilibrium in a dynamic setting augmented with rational expectations (RE) for future behavior. We derive new theorems which state sufficient conditions for the neutrality of economic policy, an...
Article
By applying the new theory of economic policy to the provision of public goods, new and interesting issues emerge. On the one hand, such well-known results as, e.g., the inefficiency of decentralized equilibria can be reinterpreted in the light of the new approach; on the other hand, new issues of coordination arise. A conflict of interest among th...
Article
Full-text available
This paper outlines contents of the new theory of economic policy that has emerged recently with reference to situations of strategic interaction. The new theory of economic policy is rooted in the classical contributions of Ragnar Frisch, Jan Tinbergen, Bent Hansen and Henri Theil, while being consistent with rational expectations (RE). It is base...
Article
By introducing the concepts of implicit coalitions and conflict of interests in a multiple-player context, this paper generalizes some theorems on policy invariance and equilibrium existence and uniqueness for LQ policy games.
Article
Full-text available
This paper extends a well-known macroeconomic stabilization game between monetary and fiscal authorities developed by Dixit and Lambertini (American Economic Review 93: 1522–1542) to multiplicative (policy) uncertainty. We find that even if fiscal and monetary authorities share a common output and inflation target (i.e., the symbiosis assumption),...
Article
Full-text available
This article extends the standard New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to agents who cannot smooth consumption (i.e. spenders) and are affected by external consumption habits. Although these assumptions are not new, their joint consideration strongly affects some theoretical and empirical results addressed by the recent...