Danila Smirnov

Global Spillovers from U.S. Bond Supply Shocks

Draft available upon request

I study spillovers from U.S. bond supply shocks, identified from yield moves around U.S. Treasury auction announcements. Using the shocks as instruments in daily and monthly local projections for AEs and EMs, I find pass through to global long rates. A debt expansion shock that raises the U.S. 10 year yield by 10 bps lifts foreign 10 year yields by roughly 7 bps within a few business days. Monthly aggregation shows contractionary real effects: U.S. industrial production falls up to 0.4 percent after eight months and foreign industrial production by a comparable amount, around 0.4 percent, with a more persistent profile. The foreign contraction reflects financial tightening, exchange rate depreciation, and weaker U.S. demand. Spillovers are heterogeneous: moving from the 25th to 75th percentile of foreign investor participation deepens IP decline by 0.5 pp. Results are robust to a demand side shock and consistent with benchmarks, highlighting U.S. bond supply as a key driver of global financial conditions and real activity, amplified by foreign investor participation and weak domestic fundamentals.

HANK-Based Fiscal Consolidation for a High-Debt Advanced Euro Area Economy

with Gee Hee Hong, Naowar Mohiuddin, Rasmane Ouedraogo, and Maryam Vaziri · IMF Working Paper 2026/121, June 2026

High-debt euro area economies face fiscal consolidation in a low-growth environment. We use a Heterogeneous Agent New Keynesian model to assess how consolidation composition shapes aggregate and distributional outcomes in a representative high-debt economy. The status quo is not neutral: delay generates its own costs through lower investment, higher debt service, and damage to constrained households. For a given fiscal effort, expenditure-based consolidation achieves faster debt reduction with lower growth and distributional costs than revenue-based consolidation. As a complementary exercise, pairing the expenditure-based path with growth-enhancing structural reforms further improves outcomes by lifting real wages, a channel that disproportionately benefits hand-to-mouth households. Across both strategies, modest well-targeted transfers to low-income households can substantially mitigate distributional costs at minimal fiscal expense while supporting aggregate demand.

Welfare Analysis of Income-Stabilization Policies in a HANK Model with Unemployment Risk

with Stefano Grancini and Marcos Poplawski-Ribeiro · IMF Working Paper 2026/076, April 2026 · Presentation

Understanding how policies can stabilize household welfare during recessions requires a framework that captures household heterogeneity, unemployment risk, and general-equilibrium labor market dynamics. We study a contractionary demand shock in a Heterogeneous-Agent New-Keynesian model with search-and-matching friction on the labor market (HANK–SAM) and compare the effectiveness of alternative income-stabilization policies. Using a common fiscal envelope, we contrast increases in unemployment insurance generosity with targeted transfers to hand-to-mouth households and universal transfers. Policy effectiveness is assessed through aggregate consumers' welfare, measured in consumption-equivalent variation units. In an economy calibrated to U.S. data, unemployment insurance yields the largest welfare gain per percentage point of fiscal cost, followed by targeted transfers, while universal transfers are the least effective. A temporary increase in unemployment insurance generates the highest welfare, as it combines immediate cash-flow support with insurance effects, disproportionately benefiting households with high marginal propensities to consume.

Macroeconomic Effects and Spillovers from Bank of Japan Unconventional Monetary Policy

with Yan Carriere-Swallow and Gene Kindberg-Hanlon · IMF Working Paper 2025/227, November 2025

We provide empirical evidence on the impact of the Bank of Japan's unconventional monetary policies on domestic economic variables and their spillovers to international sovereign yields. Using high-frequency asset price surprises to Bank of Japan (BOJ) policy announcements, we identify shocks to forward guidance (FG) and large-scale asset purchase (LSAP) policies. We show that expansionary LSAP and FG shocks increase Japanese activity and stock prices, lower unemployment, and depreciate the yen. We find that FG and LSAP shocks produce spillovers to sovereign bond yields in other countries. Spillovers from BOJ LSAP shocks seem to transmit through term premia, and the strength of spillovers is strongest to those markets where Japanese investors have a larger participation.

Heterogeneous Markups Cyclicality and Monetary Policy

with Marta Morazzoni and Andrea Chiavari · Latest version, February 2026

This paper revisits the question on the conditional cyclicality of the aggregate markup using a micro-to-macro approach, which highlights the role of firm-level heterogeneous cyclicality, the reallocation of economic activity across firms, and aggregation methods. Using US firm-level data from 1990 to 2016, we find that young firms have procyclical markups conditional on monetary shocks, while older firms show countercyclical markups. Moreover, economic activity reallocates from old to young firms after monetary shocks. Aggregating these responses, we find that the aggregate markup is countercyclical to monetary shocks. Over time, firm aging has changed the distribution of firms, altering the aggregate markup cyclicality, which helps reconcile part of the conflicting findings in the literature.

Presented at
CREI Lunch (Mar 2021) · BSE Jamboree (Oct 2021) · PhD-EVS (Feb 2022) · RES (Apr 2022) · Spring Meeting of Young Economists (May 2022) · Individual Risks and the Macroeconomy, Sciences Po (Jun 2022)

Labor and Family Dynamics in a Joint-Search Framework

with Marta Morazzoni · Latest version, January 2026

This paper develops a quantitative model of search in the labor and marriage markets. Heterogeneous agents accumulate and deplete productivity, search and lose jobs, and undergo a two-sided matching process to form couples. Sorting and selection into couples determine productivity differences across married and singles, while income-sharing insures agents in couples from productivity shocks and unemployment risk. Calibrated to U.S. evidence, the model explains 85% of the wage marital premium and 50% of the unemployment marital gap. We find that ignoring endogenous marital choices mismeasures welfare gains and fiscal costs of more generous unemployment benefits and tax credits by 20–25%.

Presented at
BSE Jamboree (Oct 2020) · CREI Lunch (Dec 2020) · Webinar in Gender and Family Economics (Jun 2021) · ESPE (Jun 2021) · EEA-ESEM (Aug 2021) · Spanish Macroeconomic Network (Oct 2021) · Dale Mortensen Copenhagen Conference (Oct 2021) · Symposium of the Spanish Economic Association (Dec 2021)

Optimal Monetary Policy in HANK

Latest version, June 2023 · first draft April 2022

I study the optimal monetary policy in a New Keynesian model with heterogeneous households. The Ramsey planner maximizes aggregate welfare in an economy with rich heterogeneity in the income distribution, as well as a wealth distribution that features an occasionally binding borrowing constraint. I show that heterogeneity qualitatively changes optimal monetary policy relative to the representative agent economy. I highlight that the importance of the novel incentive of the optimal policy in this setting comes from counteracting the increase of hand-to-mouth households in recessions. The mechanism acts through mitigating unequal exposure of households to an aggregate shock, hence the effect is partially present even in the absence of this incentive.

Presented at
BSE Jamboree (Oct 2020) · CREI Lunch (Dec 2020) · CREI Lunch (Mar 2022) · First PhD Workshop in Money and Finance, Riksbank (May 2022) · Econometric Society Australasia Meeting (Jul 2022) · EEA Congress (Aug 2022) · New Challenges to Monetary Policy, Mannheim/EABCN (Sep 2022) · CREI Lunch (Sep 2022)