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Alessandro Sardone

Alessandro Sardone
Current Position

since 9/20

Economist in the Department of Macroeconomics

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests
  • environmental macroeconomics
  • fiscal and monetary policy
  • inequality
  • forecasting

Alessandro Sardone joined the Department of Macroeconomics as a doctoral student in September 2020. His research focuses on environmental macroeconomics, monetary and fiscal policy, inequality, and forecasting.

Alessandro Sardone received his bachelor's degree from University of Trento. He participated in a Double Degree Programme and received his master's degree from Friedrich Schiller University Jena and University of Trento.

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Alessandro Sardone
Alessandro Sardone
- Department Macroeconomics
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Publications

Citations
22

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Inflation Puzzles, the Phillips Curve and Output Expectations: New Perspectives from the Euro Zone

Alessandro Sardone Roberto Tamborini Giuliana Passamani

in: Empirica, February 2022

Abstract

Confidence in the Phillips Curve (PC) as predictor of inflation developments along the business cycle has been shaken by recent “inflation puzzles” in advanced countries, such as the “missing disinflation” in the aftermath of the Great Recession and the “missing inflation” in the years of recovery, to which the Euro-Zone “excess deflation” during the post-crisis depression may be added. This paper proposes a newly specified Phillips Curve model, in which expected inflation, instead of being treated as an exogenous explanatory variable of actual inflation, is endogenized. The idea is simply that if the PC is used to foresee inflation, then its expectational component should in some way be the result of agents using the PC itself. As a consequence, the truly independent explanatory variables of inflation turn out to be the output gaps and the related forecast errors by agents, with notable empirical consequences. The model is tested with the Euro-Zone data 1999–2019 showing that it may provide a consistent explanation of the “inflation puzzles” by disentangling the structural component from the expectational effects of the PC.

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Working Papers

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Road to Net Zero: Carbon Policy and Redistributional Dynamics in the Green Transition

Alessandro Sardone

in: IWH Discussion Papers, No. 16, 2025

Abstract

<p>This paper examines the macroeconomic and distributional effects of the European Union’s transition to Net Zero emissions through a gradually increasing carbon tax. I develop a New Keynesian Environmental DSGE model with two household types and distinct energy and non-energy sectors. Five alternative uses of carbon tax revenues are considered: equal transfers to households, targeted transfers to Hand-to-Mouth households, subsidies to green energy firms, and reductions in labor and capital income taxes. In the absence of technological progress, the carbon tax policy induces a persistent increase in energy prices and a reduction in GDP, investment, and consumption. Headline inflation falls below zero in the medium run, reflecting weaker aggregate demand. Distributional outcomes vary significantly depending on the implemented revenue recycling scheme: targeted transfers are the most progressive but entail larger macroeconomic costs, while subsidies and tax cuts mitigate output and investment losses but are less effective in narrowing the consumption gap. A limited foresight scenario, in which agents learn about policy targets sequentially, generates more volatile adjustment paths and temporary inflationary spikes around announcements, but long-run outcomes remain close to the baseline.</p>

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Optimal Monetary Policy in a Two-sector Environmental DSGE Model

Oliver Holtemöller Alessandro Sardone

in: IWH Discussion Papers, No. 18, 2024

Abstract

<p>In this paper, we discuss how environmental damage and emission reduction policies affect the conduct of monetary policy in a two-sector (clean and dirty) dynamic stochastic general equilibrium model. In particular, we examine the optimal response of the interest rate to changes in sectoral inflation due to standard supply shocks, conditional on a given environmental policy. We then compare the performance of a nonstandard monetary rule with sectoral inflation targets to that of a standard Taylor rule. Our main results are as follows: first, the optimal monetary policy is affected by the existence of environmental policy (carbon taxation), as this introduces a distortion in the relative price level between the clean and dirty sectors. Second, compared with a standard Taylor rule targeting aggregate inflation, a monetary policy rule with asymmetric responses to sector-specific inflation allows for reduced volatility in the inflation gap, output gap, and emissions. Third, a nonstandard monetary policy rule allows for a higher level of welfare, so the two goals of welfare maximization and emission minimization can be aligned.</p>

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