Filippo Pallotti

I am an Economist at Lombard Odier and a PhD candidate in Economics at University College London

I work on quantitative macro models and microdata, including big data from fintech platforms. My dissertation centres on understanding the dynamics of the current inflation shock, its distributional impacts, and its effects on aggregate demand. 

I have been a PhD-Trainee in the Directorate General Research of the European Central Bank and also in the Monetary Policy Outlook Division - Strategy Team of the Bank of England.  

Prior to joining UCL, I worked as Predoctoral Research Fellow at Stanford Institute for Economic Policy Research. 

Get in touch:         Linkedin            X-Twitter (new) 


*Views are my own - usual disclaimers apply

Working papers

Average welfare impact of the 2021-22 inflation shock as % of biannual disposable income for each age class and nondurable consumption quintiles. 

"Who Bears the Costs of Inflation? Euro Area Households and the 2021-22 Shock" with Gonzalo Paz-Pardo, Jirka Slacalek, Oreste Tristani and Gianluca Violante  [paper], submitted.

Presentations (including scheduled)ECB DGR, Bank of Italy, Risksbank*, UCL, HFCN*, CESifo, JRC Ispra*, CEBRA Annual Meeting (NY FED/Columbia SIPA)*, Banco de Portugal*, EEA-ESEM (Barcelona GSE), Science Po*, Central Bank of Ireland, European Commission*. NBP Warsaw*, CBB*, Hamburg*, NBER conference on Inflation*, BIS*, Barcelona GSE Summer Forum, SED Meetings (Barcelona)*, CEBRA (Frankfurt).

Coverage: VoxEu,  ECB Research Bulletin, Bloomberg. FAZ  

We measure the heterogeneous welfare effects of the recent inflation surge across households in the Euro Area. A simple framework illustrating the numerous channels of the transmission mechanism of surprise inflation to household welfare guides our empirical exercise. By combining micro data and aggregate time series, we conclude that: (i) country-level average welfare costs –expressed as a share of 2021–22 income were larger than a typical recession, and heterogeneous, e.g., 3% in France and 8% in Italy; (ii) this inflation episode resembles an age-dependent tax, with the elderly losing up to 20%, and roughly half of the 25–44 year-old winning; (iii) losses were quite uniform across consumption quantiles because rigid rents served as a hedge for the poor; (iv) nominal net positions are the key driver of heterogeneity across-households; (v) the rise in energy prices generated vast variation in individual-level inflation rates, but unconventional fiscal policies were critical in shielding the most vulnerable households.

Net nominal position (nominal assets minus liabilities) as a % of GDP for US domestic Households, Government and the Rest of the World, 1970-2021.

Winners and Losers from Unexpected Inflation [paper]

Presentations: UCL, Surrey, ECB, Naples, ECB Macroprudential Analysis Group (MPAG), London Business School, Mannheim

I document the evolution of nominal positions in the US over the last two decades and estimate the redistributive effects of several inflation episodes. I find that the US government gained around 4.5% of US GDP from the 2021 inflation shock, essentially at the expense of foreigners. In addition, there has been a significant concentration of nominal assets among the wealthiest middle-aged and elderly households, who lost substantially. Most other groups of households gained on average. The financial sector is extremely exposed to anticipated inflation. Raising the inflation target by 2pp would have generated a modest gain for the household sector, especially at the start of the Great Recession.

Work in progress

"The Fisher Channel According to HANK: Unexpected Inflation and the Missing Recession" [draft available upon request]

Presentations (including scheduled): UCL, Paris School of Economics, Bank of England, ECB DGR, Queen Mary University of London, EEA-ESEM.

"The Short-Term Effects of Monetary Policy: Evidence from the UK", with Lennart Brandt, Johannes Fischer, Carl-Wolfram Horn [draft available upon request]

Presentations (including scheduled): Bank of England*

Abstract: We study the transmission of monetary policy on UK economic activity in the short run using daily data on hundreds of millions of transaction from a fintech, as well as data on vacancies and prices. We find that monetary policy has significant short-run effects on household spending and posted vacancies in the UK. Using local projections on UK proxies for monetary policy identified through high-frequency methods, we find that household spending significantly decreases after approximately two months and that posted vacancies significantly fall after approximately five months. Prices do not react in the short run. This provides new evidence on the speed of the monetary policy transmission in the UK that previously went undetected because of the focus on lower-frequency data.

"Shock propagation and heterogeneous MPCs across industries"

Presentations:  UCL, Stanford ECON 234