research papers
Who's in? Household-targeted Government Policies and the Role of Financial Literacy in Market Participation [CBI Research Technical Paper] [arXiv]
This paper examines how household-targeted government policies influence financial market participation conditional on financial literacy, focusing on potential Central Bank Digital Currency (CBDC) adoption. Due to the lack of empirical CBDC data, I use the introduction of retail Treasury bonds in Italy as a proxy to investigate how financial literacy affects households' likelihood to engage with the new instrument. Using the Bank of Italy's Survey on Household Income and Wealth, I explore how financial literacy influenced households' participation in the Treasury bond market following the 2012 introduction of retail Treasury bonds, showing that households with some but low financial literacy are more likely to participate than other household groups. Based on these findings, I develop a theoretical model to explore the potential implications of financial literacy for CBDC adoption, showing that low-literate households with limited access to risky assets allocate more wealth to CBDC, while high-literate households use risky assets to safeguard against income risk. These results highlight the role of financial literacy in shaping portfolio choices and CBDC adoption.
Conference presentation:
- 1st Women in Research in the European System of Central Banks (WIRE) workshop | Sveriges Riksbank, Stockholm | June 5, 2025 [poster]
Central Bank Digital Currency with Collateral-constrained Banks (forthcoming in JMCB) [arXiv]
with Hanfeng Chen
We analyze risks to bank intermediation following the introduction of a central bank digital currency (CBDC) competing with commercial bank deposits as households' source of liquidity. We revisit the equivalence of payment systems result, introducing a collateral constraint on banks' borrowing from the central bank. Comparing equilibria with and without CBDC, we find that the central bank can ensure the same equilibrium allocation by offering loans to banks. However, to access loans, banks must hold collateral at the expense of extending credit to firms. While CBDC introduction has no real effects, it changes aggregate capital ownership and banks' business models.
Conference presentation:
- Economics of Payments XIII conference | Oesterreichische Nationalbank, Vienna | September 25-27, 2024 [poster]
- 16th Nordic Summer Symposium in Macroeconomics | Normac 2024, Snekkersten | August 6-9, 2024 [slides]
- CEPR-ECB Conference “The macroeconomic implications of CBDCs” | European Central Bank, Frankfurt am Main | November 23-24, 2023 [slides]
- 2nd Conference on the Economics of CBDC by the Bank of Canada & Sveriges Riksbank | Sveriges Riksbank, Stockholm | November 16-17, 2023 [poster]
- Second PhD Workshop in Money and Finance | Sveriges Riksbank, Stockholm | May 15, 2023 [slides]
Central Bank Digital Currency: Demand Shocks and Optimal Monetary Policy [arXiv]
with Hanfeng Chen
We study the implications of a central bank digital currency (CBDC) for the transmission of household preference shocks and for welfare in a New Keynesian framework where the CBDC competes with bank deposits for household resources and banks have market power. We show that an increase in the perceived benefit of CBDC has a mildly expansionary effect, weakening bank market power and significantly reducing the deposit spread. As households economize on liquid asset holdings, they reduce both CBDC and deposit balances. However, the degree of bank disintermediation is low, as deposit outflows remain modest. We then examine the welfare implications of CBDC rate setting and find that, compared to a non-interest-bearing CBDC, the gains with standard coefficients for a CBDC interest rate Taylor rule are modest, but they become considerable when the coefficients are optimized. Welfare gains increase with the CBDC benefit, and the optimal policy responses vary with the banking market structure.
Conference presentation:
- 4th International Fintech Research Conference | University of Pavia, Pavia | January 29-30, 2026 [slides]
- 19th South-Eastern European Economic Research Workshop | Bank of Albania, Tirana | November 6-7, 2025 [slides]
policy notes
Attitudes to the Digital Euro in Ireland: Survey Evidence from the Investigation Phase [CBI Staff Insight]
with Michele Pelli
Trust is a central element of monetary and payment systems, and it plays a particularly important role when assessing the prospects for the digital euro. Ireland’s digitally advanced payment landscape provides useful context for understanding how households view the potential for digital euro adoption.
Across the euro area, Irish respondents are the fourth most likely to report being willing to use the digital euro, with trust in the euro and institutions strongly associated with adoption intentions. While 90% of Irish respondents view the traditional form of physical euro positively, digital euro awareness remains below the euro area average (at 49%), highlighting the need for enhanced public communication as the project progresses.
Digital euro awareness and adoption intentions within Ireland vary modestly across demographic groups, with men, older respondents, and the financially literate showing consistently higher awareness, willingness to adopt, and emphasis on key features such as security and business acceptance.
research in progress
The Deposit Channel of Monetary Policy in the euro area
with Hanfeng Chen
other works
A Comment on Safe Assets by Barro et al. (2022) [EconStor]
with Guillaume Coqueret, Martial Laguerre, Christoph Weber
Barro et al. (2022) investigate the quantity of safe assets held in the cross-section of developed countries and find that the average safe-asset ratio (ratio of safe assets to total assets) was 37% in 2015 and has remained relatively stable over time. They also document a crowding-out coefficient for private bonds relative to public bonds of around −0.5. In the second part of the analysis, they simulate a heterogeneous agent model with rare disasters and risk aversion to match the empirical findings. This report seeks to reproduce and confirm their results. Overall, we were largely able to replicate their findings and propose a few robustness checks. Apart from two regression outputs for which the signs and significance do not change, our results are very close to those of the original paper. Alternative models and estimators do not change the signs or significance levels. A more systematic approach to the parameter values in the simulations also points towards solid conclusions.
Gender pay gap: a route from the North to the South of Italy [RePEc]
This paper analyzes the gender pay gap across different regions in Italy, using the Oaxaca-Blinder decomposition method. We expect regional heterogeneity, both in terms of the gender pay gap and in its determinants. Our results show that, on a regional basis, the retribution gap widely varies, as its percentages of the explained and unexplained parts. Workers’ observable characteristics, related to both labor and personal features, that justify the explained part at a national level are confirmed by the regional data. Furthermore, data on the activity rate show that both at a national and regional level, female participation to the labor market, although it has been improving in recent years, is still profoundly lower than the male one. Therefore, we implement the Heckman correction, which reveals that women’s model coefficients are overestimated, at a national level and in half of the Italian regions. This result suggests that, although female participation in the labor market is lower than the male one, the fewer women participating in the labor market, on average, have higher productivity than men.