Dr Luca Rondina
Academic and research departments
Faculty of Arts and Social Sciences, School of Economics, Centre for International Macroeconomic Studies.Biography
I am a PhD candidate in Economics and member of the macroeconomics group at the School of Economics, University of Surrey.
My research focuses on Household taxation and labour supply, Intra-household bargaining, Limited commitment models, and Monetary policy.
University roles and responsibilities
- PhD students representative
My qualifications
Research
Research interests
Household Taxation and Intra-household Redistributions in a Limited Commitment Household model
Abstract. This paper investigates the effects of a transition from joint to single filing tax system on intra-household allocations and household members' individual welfare. This quantitative analysis is done using a dynamic version of the collective household model where household members can accumulate human capital by supplying hours to the labour market and individual bargaining power in the marriage can be in influenced by the value of an outside option. The underlying mechanism that drives intra-household redistributions of consumption is the following: when the tax system changes from joint to single filing, the marginal tax rate on secondary earners' income decreases while the marginal tax rate on primary earners' income increases. This creates an incentive for secondary earners to supply more hours to the labour market which it will eventually increase their stock of human capital through more experience in the workplace. When this happens, the value of the outside option (divorce) for secondary earner increases which makes the participation constraint in the limited commitment marriage contract more likely to bind and the Pareto weight on the secondary earner utility to increase. A higher bargaining power in the household creates a redistribution of consumption from primary to secondary earners.
Loose Commitment in a Sticky Wages New Keynesian model
Abstract. This paper studies optimal monetary policy under loose commitment in a model with staggered price and wage setting. Under loose commitment, the policymaker commits to a policy plan but occasionally reneges on past promises with an exogenous probability. The probability of commitment is common knowledge to the rational agents in the model which makes central bank credibility imperfect. The loose commitment framework includes the limiting cases of full commitment and discretion as special cases and allows us to investigate the relationship between credibility and welfare losses: when a central bank marginally increases its credibility, welfare losses are reduced. The welfare gain is largely independent on the initial credibility level. Moreover, the output-inflation stabilisation trade-off and the response of endogenous variables to exogenous shocks change with the degree of commitment.
My teaching
Short courses
- Research Methods: Introduction to VARs and SVARs (Spring 2018, 2019)
- CIMS Summer School: Optimal Policy Applications (Summer 2018)
- Advanced Macroeconomics: DSGE models Bayesian estimation (Spring 2018)
Teaching assistant
Graduate
- Macroeconomics (Autumn 2016, 2017, 2018)
- Advanced Macroeconomics (Spring 2018, 2019)
Undergraduate
- Principles of Macroeconomics (Spring 2017, 2019)
- Intermediate Macroeconomics (Autumn 2016)
My publications
Publications
The first chapter investigates the effects of a change in the taxation system from joint to separate taxation on households? labour supply, patterns of human capital formation, and intra-household allocations of consumption between primary and secondary earners. Household behaviour is described by an inter-temporal version of the collective household model, where household members? relative bargaining power determines intra-household allocations of consumption. Household members have limited commitment over future allocations, and their bargaining power evolves endogenously in response to changes in the gains from marriage. The tax reform is shown to cause an internal redistribution of consumption from primary to secondary earners in households where the bargaining power of secondary earners is low. Following a switch from joint to separate taxation, secondary earners? labour supply and stock of human capital are increased, which raises their value of divorce against the value of staying in the marriage. This translates into a higher bargaining power in the couple, and thus a higher share of secondary earners? consumption in the household.
The second chapter studies optimal monetary policy under loose commitment in a model with staggered price and wage setting. Under loose commitment, the policymaker commits to a policy plan but occasionally reneges on past promises with an exogenously given probability. The probability of commitment is common knowledge to the rational agents in the model, which makes central bank credibility imperfect. The loose commitment framework allows the researcher to investigate the relationship between credibility and welfare losses, measured by deviations of output gap and inflation from their targets. When a central bank marginally increases its credibility, welfare losses are reduced. The welfare gain is largely independent on the initial credibility level. Moreover, the output-inflation stabilisation trade-off and the response of endogenous variables to exogenous shocks change with the degree of commitment.