Alberto Polo

I am a Research Economist in the Monetary Analysis Directorate at the Bank of England and a member of the Centre for Macroeconomics.

I received my Ph.D. in Economics from New York University in 2019.

My research interests are in macroeconomics and monetary economics.

Curriculum Vitae GitHub RePEc Google Scholar

E-mail: alberto.polo@bankofengland.co.uk

Working Papers

IMPERFECT PASS-THROUGH TO DEPOSIT RATES AND MONETARY POLICY TRANSMISSION

I study a monetary model which is consistent with three salient features of the transmission of monetary policy. First, deposit rates adjust partially to changes in the Federal Funds rate. Second, banks substitute deposits with other liabilities in response to contractionary monetary policy changes. Finally, contractionary monetary policy shocks increase credit spreads, and in particular mortgage spreads. In the model, banks have market power in the deposit market, invest in long-duration assets but borrow using short-duration liabilities, and have a dividend-smoothing motive. Moreover, demand for banks' deposits has a dynamic component: it responds gradually to changes in current and past deposit rates, as in the literature on customer markets. I use the model to study the implications of imperfect pass-through to deposit rates for monetary policy transmission and find that the imperfect pass-through to deposit rates amplifies the response of output to monetary policy changes.

July 2020 version

‘AND YET, IT MOVES’: INTERGENERATIONAL MOBILITY IN ITALY

with Paolo Acciari (Ministry of Economy and Finance of Italy) and Gianluca Violante (Princeton University)

We link tax returns across two generations to provide the first estimate of intergenerational mobility in Italy based on administrative income data. Italy emerges as less immobile than previously depicted by studies using proxies for economic status or survey data with imputation procedures. This conclusion is robust with respect to a number of concerns, both standard when using administrative data and specific to our sample. A 10 percentile increase in parental income is associated with a percentile increase in child income between 2.5 and 3. The expected rank of children born from parents with income below the median is around 0.44. Upward mobility is higher for sons, first-born children, children of self-employed parents, and for those who migrate once adults. We uncover substantial geographical variation in the degree of upward mobility. Provinces in Northern Italy, the richest area of the country, display levels three times as large as those in the South. This regional variation is strongly correlated with local labor market conditions, indicators of family instability, and school quality.

January 2020 version

MACROECONOMIC FLUCTUATIONS AND COUNTERCYCLICAL INCOME RISK

What are the quantitative implications of countercyclical labor earnings risk? This paper investigates the welfare effects of eliminating business cycles when households face cyclical changes in the skewness of the labor earnings distribution as estimated by Guvenen, Ozkan and Song (2014). Using a heterogeneous agent, general equilibrium model with aggregate shocks I find that the average welfare effect can be as large as 9% of lifetime consumption. The welfare gain comes entirely from removing cyclical changes in the distribution of persistent idiosyncratic shocks. At the individual level, the welfare gain is increasing in earnings and decreasing in wealth. Low-earnings, low-wealth households however have little to lose from countercyclical risk and prefer the economy with aggregate fluctuations.

September 2018 version

Works In Progress

MARKET CONCENTRATION AND INVESTMENT CYCLICALITY

with Peifan Wu (University of British Columbia)

HOUSEHOLD INCOME AND DEBT

with John Barrdear (Bank of England) and Fergus Cumming (Bank of England)

COMPETITION AND FINANCIAL STABILITY IN THE UK MORTGAGE MARKET

with Arthur Taburet (London School of Economics) and Quynh-Anh Vo (Bank of England)