Sign in

Marco Garofalo

@marcogarofalo.bsky.social
105 followers 130 following 41 posts

Assistant Professor of Finance @umsbe Ex-@bankofengland PhD @OxfordEconDept ⚽️ Long-suffering AS Roma fan 🇮🇹🇳🇱🇪🇺🇬🇧 sites.google.com/view/marco-garofal…

PostsRepliesMedia
Reposted by Marco Garofalo
Katja Bego @katjabego.bsky.social · 05/10/2026
This was a lot of fun! Thank you very much for having me and the excellent questions, @snellarthur.bsky.social
1195
Reposted by Marco Garofalo
Katja Bego @katjabego.bsky.social · 25/09/2026
Today’s the day! 🥳
1611228
Reposted by Marco Garofalo
Katja Bego @katjabego.bsky.social · 26/08/2026
🚨 Just one month to go until the release of my book “Deep Connections: the Hidden Battles to Control Subsea Cables”! Pre-order here: www.politybooks.com/bookdetail?b...
2297
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[18/18] For example, these are my estimated spillovers to investment when combining both the cross-country average and heterogeneous effects for the firms in my sample. [Full quantification through DSGE model in upcoming work]
000
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[17/18] Policy relevance: emission-dependent monetary spillovers can make greener countries more resilient to global financial tightening, while browner ones, typically emerging economies, are penalised.
110
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[16/18] Summary: I uncover heterogeneous monetary spillovers across brown and green firms through a risk-taking channel and a green preferences channel. (Contributing to the literature on US monetary spillovers, climate change and monetary policy, and climate finance.)
110
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[15/18] Through this strategy, I find empirical support for both channels being at play. [See my paper for all details]
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[14/18] I identify 1) Risk-taking channel by estimating US spillovers within investors' preferences and across firms' carbon intensity. 2) Preferences channel by looking across investors’ preferences and within firm.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[13/18] As both channels operate along the same directions though, this leads to an identification challenge! I overcome it by matching granular investor-firm data for US global funds holdings. [See paper for additional analyses with syndicated loans to non-US borrowers]
110
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[12/18] Both channels imply that tighter US monetary policy widens the return differential between brown and green assets, and thus disproportionally decrease capital and investment for brown firms, in line with my empirical evidence.
110
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[11/18] 2) Investors have non-pecuniary motives to hold green assets as opposed to brown, that is they have green preferences.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[10/18] 1) Investors have different risk-bearing capacity for brown and green firms, because brown assets are more exposed to transition risk, i.e. future cashflow losses from policy and technological innovation linked to the global move to a low-carbon economy.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[9/18] Second, to rationalize these findings, I develop a model featuring global investors with two financial frictions.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[8/18] … and investment decrease by more.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[7/18] … their debt …
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[6/18] … their bond spreads rise by more …
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[5/18] Non-US firms with higher carbon intensity see their equity prices decline by more …
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[4/18] First, combining high-frequency monetary surprises with firm-level data for ~5,000 non-US firms across 38 countries, I show that US monetary tightening disproportionately impacts brown relative to green firms.
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[3/18] This is a timely question because of current time of higher interest rates, which many argue may slow the global green transition down (e.g. larger/higher-risk capital costs for development of renewable energy infrastructure and associated R&D). 3 takeaways:
110
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
[2/18] US monetary policy has an impact beyond national borders. But not all non-US firms are affected in the same way. Novel source of heterogeneity in spillovers: *** Do US monetary policy shocks affect brown (i.e. high-carbon intensity) and green firms differently? ***
100
Marco Garofalo @marcogarofalo.bsky.social · 02/12/2025
🚨New Paper🚨 I study how US monetary policy shocks affect non-US firms depending on their carbon emissions: brown firms experience higher bond spreads, lower equity prices and investment. ➡️🟩/🟫 economies more/less resilient t.co/fWb4VLpha1 🧵[1/18] #EconSky
120
Marco Garofalo @marcogarofalo.bsky.social · 23/10/2025
Given today’s news on US sanctions, thought to repost this 👇🏻 New improved draft coming soon!
020
Marco Garofalo @marcogarofalo.bsky.social · 21/06/2025
Link to paper w/ my amazing co-authors Giovanni Rosso and Roger Vicquery ora.ox.ac.uk/objects/uuid...
ora.ox.ac.uk
010
Marco Garofalo @marcogarofalo.bsky.social · 21/06/2025
Phenomenal #NBUNBPconference25 at National Bank of Ukraine. Presented our work on financial sanctions and USD dominance, focusing on how post-2014 international lending to Russia de-dollarized ($⬇) in favour of a euroization (€⬆️) events.bank.gov.ua/ARConference...
events.bank.gov.ua
Research Conference 2025
Research Conference NBU
140
Reposted by Marco Garofalo
Katja Bego @katjabego.bsky.social · 09/06/2025
On increasing the NATO spending norm to 5%: “Spending more is not about pleasing an audience of one, it is about protection a billion people.” Mark Rutte at @chathamhouse.org
0258
Reposted by Marco Garofalo
Chatham House @chathamhouse.org · 06/06/2025
Ukraine’s Operation Spider’s Web will enter the history books as one of the most remarkable and best-executed covert operations of the war, writes @katjabego.bsky.social.
chathamhouse.org
Ukraine’s Operation Spider’s Web is a game-changer for modern drone warfare. NATO should pay attention
The use of cheap drones to strike targets deep within Russia provides a blueprint for rapidly evolving modern warfare that should inform how states seek to defend themselves.
13111
Reposted by Marco Garofalo
Daniel McDowell @danielmcdowell.bsky.social · 15/04/2025
Fascinating new work linking financial sanctions to the dollar's use in Russia.
092
Reposted by Marco Garofalo
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
📣📣📣 New paper out 📣📣📣 With Giovanni Rosso and Roger Vicquery, we study the interplay between financial sanctions and dollar dominance focusing on how post-2014 international lending to Russia de-dollarized ($⬇) in favour of a euroization (€⬆️) ora.ox.ac.uk/objects/uuid... 🧵👇[1/10] #EconSky
2103
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
ICYMI: @davidbeckworth.bsky.social @helene-rey.bsky.social @danielmcdowell.bsky.social @apferrero.bsky.social @antoineberthou.bsky.social @edwardfishman.bsky.social @himself.bsky.social @mmaggiori.bsky.social @weisenthal.bsky.social @guntramwolff.bsky.social @rebeccawire.bsky.social
240
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
Specifically, our main innovation is to model sanctions as a currency-specific wedge on assets with different denominations. As US sanctions tighten the constraint on USD assets, financial intermediaries reallocate their portfolios towards other currencies. [10/10]
140
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
We plug this insight into a novel 3-country 3-currency framework, where financial sanctions are financial frictions. [9/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
In other words: financial sanctions created a new currency-circuit-specific friction. The risk of counterparts being cut off from the dollar payment system led to a rebalancing of portfolios towards the euro. [8/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
Why the euro? We argue that the threat of US extra-territorial sanctions targeting users of the USD international payment system increased “settlement risk” for USD transactions, relative to EUR. [7/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
Even more striking: the shift to euro lending happened regardless of the bank’s national jurisdiction, i.e. whether the ultimate parent was American, European/G7, or from a non-sanctioning country. [6/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
So, banks didn’t necessarily leave, but they changed currency … [5/10]
140
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
We zoom in on the UK using confidential bank-level data, and show that most of the new euro lending came from the same banks that had decreased their USD lending: both banks that started lending in EUR (🟨👇), and those already lending in EUR which started to lend more (🟦👇). [4/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
But this aggregate picture disguises a striking underlying fact: the share of cross-border lending to Russia in US dollars fell from 65% to 25%. Meanwhile, euro-denominated lending rose from 20% to 45%. (Source: BIS LBS) How did that happen? [3/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
Following the 2014 invasion of Crimea and the imposition of financial sanctions on Russia, global cross-border lending to Russia declined significantly. (Source: BIS LBS) [2/10]
130
Marco Garofalo @marcogarofalo.bsky.social · 15/04/2025
📣📣📣 New paper out 📣📣📣 With Giovanni Rosso and Roger Vicquery, we study the interplay between financial sanctions and dollar dominance focusing on how post-2014 international lending to Russia de-dollarized ($⬇) in favour of a euroization (€⬆️) ora.ox.ac.uk/objects/uuid... 🧵👇[1/10] #EconSky
2103
Marco Garofalo @marcogarofalo.bsky.social · 07/04/2025
010
Marco Garofalo @marcogarofalo.bsky.social · 07/04/2025
bankofengland.co.uk/-/media/boe/... new version coming soon!
bankofengland.co.uk
130
Marco Garofalo @marcogarofalo.bsky.social · 07/04/2025
Fantastic 10th Annual West Coast Workshop in International Finance at Santa Clara last Friday. Huge thanks to Vito Cormun, Helen Popper, @sanjaysingh.bsky.social and all organisers! Top research by colleagues and great to share the latest version of our paper on UK export dollarization post-Brexit.
351
Reposted by Marco Garofalo
Thomas Sampson @thomsampson.bsky.social · 07/04/2025
Interested in how trade barriers affect firms? New @voxeu.org column on our research on firm-level effects of Brexit on UK goods trade Leaving single market and customs union reduced UK exports and imports Smaller firms hardest hit: around 16,400 firms stopped exporting to EU because of TCA
02414
Reposted by Marco Garofalo
VoxEU @ CEPR @voxeu.org · 07/04/2025
Dismantling deep integration has consequences for #trade. Brexit reduced worldwide UK #exports by 6.4% and worldwide #imports by at least 3.1%. Smaller firms suffered larger declines than large firms. @marcogarofalo.bsky.social @thomsampson.bsky.social et al cepr.org/voxeu/column... #EconSky
Graphs of the estimated changes in firm trade with EU versus rest of the world following Brexit by firm size quintile. Smaller firms experienced a larger impact than large firms.

How does dismantling deep integration affect international trade? This column uses firm-level customs data to study the impact of Brexit on UK goods trade. The authors find that in the short term, exit from the Single Market and Customs Union reduced worldwide UK exports by 6.4% and worldwide imports by at least 3.1%. Importers partly compensated for lower EU imports by sourcing more from outside the EU, while exports to non-EU countries were unaffected. Moreover, smaller firms suffered larger declines in trade with the EU, whereas the largest firms did not experience a fall in exports.
Lookup fields should be configured in the field menu dropdown
02510
Reposted by Marco Garofalo
Sanjay R. Singh @sanjaysingh.bsky.social · 02/04/2025
We are looking forward to the 10th Annual West Coast Workshop in International Finance at Santa Clara University this Friday. Program can be found here: sanjayrajsingh.github.io/CFP/Agenda_W...
031
Reposted by Marco Garofalo
Marco Garofalo @marcogarofalo.bsky.social · 12/03/2025
Really great to see our research on the impact of Brexit on UK trade featured in today’s @adamtooze.bsky.social Chartbook.
2149
Marco Garofalo @marcogarofalo.bsky.social · 12/03/2025
For the full open access paper with my co-authors @thomsampson.bsky.social, Rebecca Freeman, Enrico Longoni, Kalina Manova, Rebecca Mari and Thomas Prayer, see here: ora.ox.ac.uk/objects/uuid...
ora.ox.ac.uk
Deep integration and trade: UK firms in the wake of Brexit - ORA - Oxford University Research Archive
How does dismantling deep integration affect international trade? This paper provides new evidence on the consequences of disintegration by estimating the impact of Brexit on goods trade by UK firms. The UK’s exit from the EU’s single market and customs union in January 2021 led to an immediate,
010
Marco Garofalo @marcogarofalo.bsky.social · 12/03/2025
Really great to see our research on the impact of Brexit on UK trade featured in today’s @adamtooze.bsky.social Chartbook.
2149
Reposted by Marco Garofalo
Chatham House @chathamhouse.org · 25/02/2025
"Russia's pushing of the envelope when it comes to these hybrid attacks means that the Kremlin is playing with fire." Senior Research Fellow @katjabego.bsky.social joins the @wsj.com to discuss the allegations of sabotage in the Baltic Sea and Moscow’s hybrid war with NATO.
wsj.com
Europe’s Undersea Cable-Cutting Mystery, Explained
WSJ unpacks the allegations of sabotage that have turned the Baltic Sea into the focal point of Moscow’s hybrid war with NATO.
03316
Reposted by Marco Garofalo
Centre for Economic Performance @cep-lse.bsky.social · 19/02/2025
Sneak peek at CentrePiece – out tomorrow! Featuring: Remembering Daniel Kahneman, China’s solar power and EU firms, women inventors, online doctors, the UK car industry, AI survey interviews, capping rental fees, Brexit and UK firms.
113