Banca d'Italia expands research on policy, climate, migration

Banca d'Italia's latest working papers delve into critical economic issues, offering new perspectives on monetary policy transmission, climate finance, and the impact of economic shocks.

Paper No. 1533, 'Deposit funding, market power and monetary policy transmission', assesses the ECB's monetary tightening in 2022-23, finding that policy rate increases were passed through to overnight deposit rates in the euro area less than implied by historical regularities.

It highlights that greater bank market power and a higher share of deposits tend to dampen transmission, with market power effects being more persistent.

Another study (No. 1531), 'Macroeconomic effects of the green transition in the euro area and critical mineral bottlenecks', uses a dynamic general equilibrium model to show that subsidies for renewable energy production have expansionary effects, but their magnitude is smaller when critical mineral supply from China declines.

The paper also notes that the negative macroeconomic impact of increased critical mineral prices is limited in the short run if new renewable energy capacity installation is spread over time.

Research also explores 'Profit shifting via intragroup lending' (No. 1529), providing novel evidence on how multinational groups use intragroup loans to reduce their overall tax burden, although the effectively avoided corporate tax in Italy is estimated to be modest.

Furthermore, 'A great depression? Students' educational aspirations and investments in the aftermath of the Great Recession' (No. 1528) examines how economic crises can persistently reduce students' aspirations for university studies and worsen educational outcomes.

These studies collectively highlight the complex interplay between financial markets, policy interventions, and broader societal trends, providing granular data and model-based insights for policymakers across various domains.

Banca d'Italia's forthcoming events schedule a series of high-level discussions on pressing global and domestic economic issues, fostering dialogue between leading academics, central bank researchers, and policymakers.

The 'Macro Migration Workshop' on June 19, 2026, will explore the macroeconomic implications of migration, including its effects on the business cycle, price dynamics, the labour market, firm dynamics and innovation, and public finance.

In September, the '3rd EPSI (Economics of the Public Sector and Institutions) Conference' (September 14-15) will host leading scholars working on the role of the public sector and institutions in economic activity, featuring keynote lectures by Professors Chiara Farronato (Harvard Business School) and Michael Carlos Best (Columbia University).

Later that month (September 24-25), the 'Macroeconomic Modelling in Times of Uncertainty' conference will address new approaches to modelling and estimating the effects of rising uncertainty on the economy as a whole, through the decisions of firms and households, on the transmission of monetary and fiscal policy, as well as on macroeconomic forecasting and scenario analysis.

Dario Caldara (Federal Reserve Board) and Barbara Rossi (European University Institute and Universitat Pompeu Fabra) are confirmed keynote speakers.

These gatherings underscore the central bank's commitment to fostering academic discourse and engaging with cutting-edge research to inform policy responses to today's interconnected world.