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:  filippo.pallotti@ucl.ac.uk         Linkedin            X-Twitter (new) 

Research

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:  ECB DGR, Bank of Italy, Risksbank*,  CESifo, JRC Ispra*, CEBRA Annual Meeting (NY FED/Columbia SIPA)*, Banco de Portugal*, EEA-ESEM (Barcelona GSE), Science Po*, Central Bank of Ireland

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 soon]

Presentations: UCL, Paris School of Economics, Bank of England

"The High Frequency Effect of Monetary Policy", with Lennart Brandt, Johannes Fischer, Carl-Wolfram Horn

"Shock propagation and heterogeneous MPCs across industries"

Presentations:  UCL, Stanford ECON 234