Publications

Abstract art of books
Jonathan Heathcote, Fabrizio Perri, Gianluca Violante
Review of Economic Dynamics, Vol. 50, Oct 2023, 235-266

We expand the "Unequal We Stand" analysis of empirical trends in US inequality, and extend it up to 2021. Special issue of RED in memory of Tom Cooley

Gianluca Violante
NBER Macroeconomics Annual, Vol. 37, May 2023

I explain why the idea of human capitalists is important in a number of areas of macroeconomics.

Adrien Bilal, Niklas Engbom, Simon Mongey, Gianluca Violante
The Economics of Creative Destruction: New Research on Themes from Aghion and Howitt (U. Akcigit and J. Van Reenen, eds.), Jan 2023

This paper evaluates the impact of slower economic growth on labor market dynamism and misallocation by developing a model of endogenous growth via imitation in a frictional labor market. Slower growth can explain declining business and labor market dynamism but, surprisingly, it leads to less misallocation.

Fatih Guvenen, Luigi Pistaferri, Gianluca Violante
Quantitative Economics, Vol. 13, Dec 2022, 321-1360

We introduce the Global Repository of Income Dynamics (GRID) is a new open-access, cross-country database that contains a wide range of  micro statistics on income inequality, dynamics, and mobility. It has four key characteristics: administrative, longitudinal, granular, and harmonized.

Greg Kaplan, Gianluca Violante
Annual Review of Economics, Vol. 14, Aug 2022, 747-775

A systematic investigation on whether, and how, an array of commonly used heterogeneous-agent incomplete-markets models can generate MPCs in line with the empirical evidence.

Video of the Laffont Lecture

Documents
Gianluca Violante
Proceedings of the ECB Forum on Central Banking 2021

Four useful lessons we learned from HANK models on the transmission mechanism, amplification channels, redistributive implications, and empirics of monetary policy.

Adrien Bilal, Niklas Engbom, Simon Mongey, Gianluca Violante
Econometrica, Vol. 90(4), Jul 2022, 1425-1462

We characterize the equilibrium of a labor market with OJS and decreasing returns to scale in technology by building on the idea of joint value of the firm and its incumbents. The model yields a job ladder in marginal surplus which explains the failure of the job ladder after the Great Recession as a result of the collapse of firm entry.

Paolo Acciari, Alberto Polo, Gianluca Violante
American Economic Journal: Applied Economics, Vol. 14(3), Oct 2021, 118-163

Administrative tax-return data shed new light on the degree of intergenerational income mobility in Italy since the late 1990s. Mobility is higher than in the US, but lower than in Scandinavia. It is sharply heterogeneous across provinces, with a steeply positive South-North gradient.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Journal of the European Economic Association, Vol. 18(6), Dec 2020, 2715-2754

It depends on whether the force behind it is a rise in the skill premium or in uninsurable income risk. Through the lenses of our model, in the US these two forces offset each other over the last 40 years and optimal tax progressivity should not have changed much. We argue the data agree with this prediction.

Felipe Alves, Greg Kaplan, Ben Moll, Gianluca Violante
Journal of Money, Credit and Banking, Vol. 52, Dec 2020, 521-559

A quantitative assessment of the relative importance of some key forces of amplification and dampening of monetary policy shocks in HANK models. In the Special Issue celebrating the 50th anniversary of the JMCB

Greg Kaplan, Kurt Mitman, Gianluca Violante
Journal of Political Economy, Vol. 128(9), Sep 2020, 3285-3345

An equilibrium model of the US economy with endogenous fluctuations in house prices allows to address three questions. What was the key source of the boom and bust in house prices? How much of the consumption dynamics around the Great Recession was caused by house prices? Would a massive debt forgiveness policy have cushioned the bust?

Greg Kaplan, Kurt Mitman, Gianluca Violante
Journal of Public Economics, Vol. 189, Sep 2020

We revisit and refine the Mian-Rao-Sufi estimate of the impact of the drop in housing net worth on consumption during 2006-09, using easily accessible micro data on housing wealth, liabilities, and non-durable expenditures.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Journal of Public Economics, Vol. 189, Sep 2020

When the degree of tax progressivity is allowed to vary with age, the age profile of progressivity is U-shaped because of offsetting forces. The welfare gains from this more flexible tax system are around 2% of lifetime consumption.

Jonathan Heathcote, Fabrizio Perri, Gianluca Violante
Review of Economic Dynamics, Vol. 37, Aug 2020, S181-204

Recessions that occur against the backdrop of SBTC have persistent effects on non-participation and earnings inequality at the bottom of the distribution. Special Issue of the RED on The 25th anniversary of Frontiers of Business Cycle Research

Jiri Slacalek, Oreste Tristani, Gianluca Violante
Journal of Economic Dynamics and Control, Vol. 115, Jun 2020

We combine a simple analytical model with measurement from micro survey data and VARs to estimate the effect of an interest rate cut on aggregate consumption, and its transmission mechanism across the distribution of households as a function of their wealth portfolios and their income exposure.

Brant Abbott, Giovanni Gallipoli, Costas Meghir, Gianluca Violante
Journal of Political Economy, Vol. 127(6), Dec 2019, 2569–2624

The current U.S. financial aid system to college education is very valuable: removing it would reduce welfare by nearly 6% in the long-run. However, further marginal expansions of aid would have no salient aggregate effects because of substantial crowding-out of parental transfers.

Greg Kaplan, Gianluca Violante
Journal of Economic Perspectives, Vol. 32(3), Aug 2018, 167-194

Do household heterogeneity and market incompleteness matter for the response of the economy to aggregate shocks? We discuss how macroeconomists have thought about this question over the last three decades and then zoom in on HANK models.

Alessandro Gavazza, Simon Mongey, Gianluca Violante
American Economic Review, Vol. 108(8), Aug 2018, 2088-2127

Firms' recruiting effort is strongly procyclical and can explain much of the fluctuations in aggregate matching efficiency.

Gianluca Violante
2017 NBER Macroeconomics Annual, Vol. 32(1), Jun 2018

Adelino et al. present some very useful descriptive empirical work that helps us understanding the forces behind the recent boom-bust in house prices (looser credit or shift in expectations?). I argue that one needs more structure to make further progress. 

Greg Kaplan, Ben Moll, Gianluca Violante
American Economic Review, Vol. 18(3), Mar 2018, 697-743

In Heterogeneous Agent New Keynesian (HANK)  models the transmission mechanism of monetary policy is entirely different from that of Representative Agent New Keynesian (RANK) models: more indirect GE effects and less intertemporal substitution.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Quarterly Journal of Economics, Vol. 132(4), Nov 2017, 1693–1754

What is the optimal degree of tax progressivity when households economic outcomes are determined by their initial ability, partially insurable wage shocks, taste for work, and human capital investment? A Ramsey-style answer to this question.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Research in Economics, Vol. 71(3), Sep 2017, 521-539

The rise in female labor supply explains half of the growth in U.S. average earnings since the mid 1960s, but none of the dynamics of earnings inequality because of offsetting effects on the income distribution.

Christina Patterson, Aysegul Sahin, Giorgio Topa, Gianluca Violante
European Economic Review, Vol. 84, May 2016, 42-56

Much of the slow growth in U.K. productivity after the Great Recession can be explained by the fact that the bulk of new hires occurred in occupations and industries with low labor productivity.

Nicola Pavoni, Ofer Setty, Gianluca Violante
Review of Economic Dynamics, Vol. 20, Apr 2016, 160-180

Soft welfare-to-work programs make no use of punishments or sanctions. Their optimal design can be characterized analytically and shown to be robust to hidden saving. Plenary Lecture at the 2013 Annual Meeting of the SED (Seoul, Korea)

Greg Kaplan, Justin Weidner, Gianluca Violante
Brookings Papers on Economic Activity, Vol. Spring, May 2014, 77-138

Survey data on household portfolios for 8 countries reveal that the group of wealthy HtM (low liquid wealth but sizable illiquid wealth) is twice as large as that of poor HtM (low net worth). This observation matters for fiscal policy.

Aysegul Sahin, Joseph Song, Giorgio Topa, Gianluca Violante
American Economic Review, Vol. 104(11), Nov 2014, 3529-3564

Mismatch across industries and occupations explains at most 1/3 of the total observed increase in the unemployment rate over the Great Recession, whereas geographical mismatch plays no apparent role.

Greg Kaplan, Gianluca Violante
Econometrica, Vol. 82(4), Jul 2014, 1199-1239

Wealthy hand-to-mouth households -who hold little or no liquid wealth despite owning sizable quantities of illiquid assets- can help accounting for the large estimated propensities to consume out of (small) tax rebates.

Greg Kaplan, Gianluca Violante
American Economic Review P&P, Vol. 104(5), May 2014, 116-121

We study how differences in (i) the size of the transfer, (ii) the design of the policy, and (iii) the state of the macroeconomy account for the differences in the consumption response to the fiscal stimulus payment episodes of 2001 and 2008.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
American Economic Review, Vol. 104(7), Jul 2014, 2075-2126

An analytically tractable equilibrium framework to measure the degree of consumption insurance. The news is that data on individual labor supply can be very informative about the extent of risk sharing in the economy

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Advances in Economics and Econometrics (D. Acemoglu, M. Arellano, E. Dekel, eds.), May 2013

A critical evaluation of the large literature that studies the welfare consequences of the recent shift in the wage structure in the United States.

Bulent Guler, Fatih Guvenen, Gianluca Violante
Journal of Monetary Economics, Vol. 59(4), May 2012, 352-369

Compared to single-agent search, joint search offers additional opportunities to the couple (similarly to on-the-job search), but it also imposes additional costs when job offers can originate from multiple locations.

Andreas Hornstein, Per Krusell, Gianluca Violante
American Economic Review, Vol. 101(7), Dec 2011, 2873-2898

The observed magnitude of worker flows implies that in a wide range of search and matching models frictional wage dispersion is very small.

Orazio Attanasio, Sagiri Kitao, Gianluca Violante
Demography and the Economy (J. Shoven, ed.), Jan 2011

The labor income tax will have to increase from 23% in 2005 to 36% in 2080 to finance the rising costs of Medicare. Under an open-economy scenario, the tax would have to rise by much less.

Greg Kaplan, Gianluca Violante
American Economic Journal: Macroeconomics, Vol. 2(4), Oct 2010, 53-87

In a calibrated life-cycle incomplete markets model, households have access to less consumption smoothing against permanent earnings shocks than what is measured in the data.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Journal of Political Economy, Vol. 118(4), Aug 2010, 681-722

Welfare implications of the recent widening of the wage distribution are complex: bigger idiosyncratic shocks imply welfare losses due to imperfect insurability, but gender-biased and especially skill-biased demand shifts are welfare improving.

Dirk Krueger, Fabrizio Perri, Luigi Pistaferri, Gianluca Violante
Review of Economic Dynamics, Vol. 13(1), Jan 2010, 1-14

Introductory article to the RED special issue on Cross-Sectional Facts for Macroeconomists. Data and Codes for all articles in this issue are available from this same link.

Jonathan Heathcote, Fabrizio Perri, Gianluca Violante
Review of Economic Dynamics, Vol. 13(1), Jan 2010, 15-51

To document how different dimensions of inequality are related via choices, markets, and institutions, we follow the mapping implied by the household budget constraint from individual wages to individual earnings, to household earnings, to disposable income, and, ultimately, to consumption and wealth. 

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Annual Review of Economics, Vol. 1, May 2009, 319-354

A review of quantitative macroeconomics that focuses on household heterogeneity, with a special focus on the "standard" incomplete-markets model.

Gianluca Violante
The New Palgrave Dictionary of Economics, Dec 2008

A condensed explanation of the meaning of skill-biased technical change.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Journal of Monetary Economics, Vol. 55(3), Apr 2008, 501-525

An analytical study of the welfare implications of idiosyncratic labor market risk showing that removing uncertainty is different from insuring uncertainty.

Nicola Pavoni, Gianluca Violante
Review of Economic Studies, Vol. 74(1), Jan 2007, 283-318

An optimal sequence of activities for a jobless welfare recipient whose skills depreciated during unemployment and whose effort is unobservable is: first Unemployment Insurance-->Job-Search Monitoring-->Social Assistance.

Andreas Hornstein, Per Krusell, Gianluca Violante
Review of Economic Studies, Vol. 74(4), Oct 2007, 1089-1124

Capital-embodied technological change reduces labor demand and raises equilibrium unemployment. More so, in the presence of labor market regulation. This interaction explains the different labor market experiences of US and Europe in the 1980s and 1990s.

Orazio Attanasio, Sagiri Kitao, Gianluca Violante
Journal of Monetary Economics, Vol. 54(1), Jan 2007, 144-198

Does a two-region model of the global demographic transition have similar implications compared to a closed-economy model for the sustainability of US social security? Yes.

Orazio Attanasio, Sagiri Kitao, Gianluca Violante
Advances in Macroeconomics, The B.E. Journals in Macroeconomics, Vol. 6(1), 2006

The long-run effects of demographic trends for less developed countries depend on the degree of international capital mobility and on the extent to which the pay-as-you-go pension systems in place in the more developed world will survive.

Andreas Hornstein, Per Krusell, Gianluca Violante
Handbook of Economic Growth (P. Aghion and S. Durlauf ,eds.), Vol. 1, Part B, Dec 2005

An overview of twenty years of literature on the many ways in which technological progress shapes the distribution of wages and other economic outcomes.

Andreas Hornstein, Per Krusell, Gianluca Violante
Federal Reserve Bank of Richmond Economic Quarterly, Vol. 91(3), Jul 2005, 19-51

An introduction to the debate on the quantitative business-cycle implications of the matching model of unemployment.

Andreas Hornstein, Per Krusell, Gianluca Violante
Journal of the European Economic Association, Vol. 3, Sep 2005, 1007-1057

The standard matching model with vintage capital ad a version with "machine upgrading" are almost equivalent, quantitatively.

Jonathan Heathcote, Kjetil Storesletten, Gianluca Violante
Journal of the European Economic Association, Vol. 3, Apr 2005, 765-775

The choice of whether to control for cohort or time effects has a drastic impact on the estimated age profiles for inequality. If analyzing data for the last 30 years, time effects are much more important.

Pietro Garibaldi, Gianluca Violante
Economic Journal, Vol. Vol. 115, Oct 2005, 799-832

The employment effects of severance payments combined with wage rigidities are not the same as those of firing taxes.

Gianluca Violante
NBER Macroeconomics Annual, Vol. 18, May 2003, 72-80

Theory tells us that organizational capital plays an important role in macroeconomics, especially in phases of technological transformation, but we are still lacking reliable direct measurement.