Showing papers by "Francesco Grigoli published in 2020"

Mobility under the COVID-19 Pandemic: Asymmetric Effects across Gender and Age

Abstract: Lockdowns and voluntary social distancing led to significant reduction in people’s mobility. Yet, there is scant evidence on the heterogeneous effects across segments of the population. Using unique mobility indicators based on anonymized and aggregate data provided by Vodafone for Italy, Portugal, and Spain, we find that lockdowns had a larger impact on the mobility of women and younger cohorts. Younger people also experienced a sharper drop in mobility in response to rising COVID-19 infections. Our findings, which are consistent across estimation methods and robust to a variety of tests, warn about a possible widening of gender and inter-generational inequality and provide important inputs for the formulation of targeted policies.

Full-waveform-based characterization of acoustic emission activity in a mine-scale experiment: a comparison of conventional and advanced hydraulic fracturing schemes

Abstract: Understanding fracturing processes and the hydromechanical relation to induced seismicity is a key question for enhanced geothermal systems (EGS). Commonly massive fluid injection, predominately causing hydroshearing, are used in large-scale EGS but also hydraulic fracturing approaches were discussed. To evaluate the applicability of hydraulic fracturing techniques in EGS, six in situ, multistage hydraulic fracturing experiments with three different injection schemes were performed under controlled conditions in crystalline rock at the Äspö Hard Rock Laboratory (Sweden). During the experiments the near-field ground motion was continuously recorded by 11 piezoelectric borehole sensors with a sampling rate of 1 MHz. The sensor network covered a volume of 30×30×30 m around a horizontal, 28-m-long injection borehole at a depth of 410 m. To extract and characterize massive, induced, high-frequency acoustic emission (AE) activity from continuous recordings, a semi-automated workflow was developed relying on full waveform based detection, classification and location procedures. The approach extended the AE catalogue from 196 triggered events in previous studies to more than 19 600 located AEs. The enhanced catalogue, for the first time, allows a detailed analysis of induced seismicity during single hydraulic fracturing experiments, including the individual fracturing stages and the comparison between injection schemes. Beside the detailed study of the spatio-temporal patterns, event clusters and the growth of seismic clouds, we estimate relative magnitudes and b-values of AEs for conventional, cyclic progressive and dynamic pulse injection schemes, the latter two being fatigue hydraulic fracturing techniques. While the conventional fracturing leads to AE patterns clustered in planar regions, indicating the generation of a single main fracture plane, the cyclic progressive injection scheme results in a more diffuse, cloud-like AE distribution, indicating the activation of a more complex fracture network. For a given amount of hydraulic energy (pressure multiplied by injected volume) pumped into the system, the cyclic progressive scheme is characterized by a lower rate of seismicity, lower maximum magnitudes and significantly larger b-values, implying an increased number of small events relative to the large ones. To our knowledge, this is the first direct comparison of high resolution seismicity in a mine-scale experiment induced by different hydraulic fracturing schemes.

Dampening Global Financial Shocks: Can Macroprudential Regulation Help (More than Capital Controls)?

Abstract: We show that macroprudential regulation can considerably dampen the impact of global financial shocks on emerging markets. More specifically, a tighter level of regulation reduces the sensitivity of GDP growth to VIX movements and capital flow shocks. A broad set of macroprudential tools contribute to this result, including measures targeting bank capital and liquidity, foreign currency mismatches, and risky forms of credit. We also find that tighter macroprudential regulation allows monetary policy to respond more countercyclically to global financial shocks. This could be an important channel through which macroprudential regulation enhances macroeconomic stability. These findings on the benefits of macroprudential regulation are particularly notable since we do not find evidence that stricter capital controls provide similar gains.

Induced seismicity risk analysis of the hydraulic stimulation of a geothermal well on Geldinganes, Iceland

Abstract: . The rapid increase in energy demand in the city of Reykjavik has posed the need for an additional supply of deep geothermal energy. The deep-hydraulic (re-)stimulation of well RV-43 on the peninsula of Geldinganes (north of Reykjavik) is an essential component of the plan implemented by Reykjavik Energy to meet this energy target. Hydraulic stimulation is often associated with fluid-induced seismicity, most of which is not felt on the surface but which, in rare cases, can be a nuisance to the population and even damage the nearby building stock. This study presents a first-of-its-kind pre-drilling probabilistic induced seismic hazard and risk analysis for the site of interest. Specifically, we provide probabilistic estimates of peak ground acceleration, European microseismicity intensity, probability of light damage (damage risk), and individual risk. The results of the risk assessment indicate that the individual risk within a radius of 2 km around the injection point is below 0.1 micromorts, and damage risk is below 10 −2 , for the total duration of the project. However, these results are affected by several orders of magnitude of variability due to the deep uncertainties present at all levels of the analysis, indicating a critical need in updating this risk assessment with in situ data collected during the stimulation. Therefore, it is important to stress that this a priori study represents a baseline model and starting point to be updated and refined after the start of the project.

Protecting Lives and Livelihoods with Early and Tight Lockdowns

Abstract: Using high-frequency proxies for economic activity over a large sample of countries, we show that the economic crisis during the first seven months of the COVID-19 pandemic was only partly due to government lockdowns. Economic activity also contracted because of voluntary social distancing in response to higher infections. We also show that lockdowns can substantially reduce COVID-19 infections, especially if they are introduced early in a country's epidemic. Despite involving short-term economic costs, lockdowns may thus pave the way to a faster recovery by containing the spread of the virus and reducing voluntary social distancing. Finally, we document that lockdowns entail decreasing marginal economic costs but increasing marginal benefits in reducing infections. This suggests that tight short-lived lockdowns are preferable to mild prolonged measures.

Full-Waveform based methods for Microseismic Monitoring Operations: an Application to Natural and Induced Seismicity in the Hengill Geothermal Area, Iceland

Abstract: . Geothermal systems in the Hengill volcanic area, SW Iceland, started to be exploited for electrical power and heat production since the late 1960s. Today the two largest operating geothermal power plants are located at Nesjavellir and Hellisheiði. This area is a complex tectonic and geothermal site, located at the triple junction between the Reykjanes Peninsula (RP), the Western Volcanic Zone (WVZ), and the South Iceland Seismic Zone (SISZ). The region is seismically highly active with several thousand earthquakes located yearly. The origin of such earthquakes may be either natural or anthropogenic. The analysis of microseismicity can provide useful information on natural active processes in tectonic, geothermal and volcanic environments as well as on physical mechanisms governing induced events. Here, we investigate the microseismicity occurring in Hengill area, using a very dense broadband seismic monitoring network deployed in Hellisheiði since November 2018, and apply sophisticated full-waveform based method for detection and location. Improved locations and first characterization indicate that it is possible to identify different types of microseismic clusters, which are associated with either production/injection or the tectonic setting of the geothermal area.

Network effects and research collaborations

Abstract: We study the determinants of new and repeated research collaborations, drawing on the co-authorship network of the International Monetary Fund (IMF)’s Working Papers series. Being an outlet where authors express their views on topics of interest, and given that IMF staff is not subject to the “publish-or-perish” conditions of the academia, the IMF Working Papers series constitutes an appropriate testing ground to examine the endogenous nature of co-authorship formation. We show that the co-authorship network is characterized by many authors with few direct co-authors, yet indirectly connected to each other through short co-authorship chains. We find that a shorter distance in the co-authorship network is key for starting research collaborations. Also, higher research productivity, being employed in the same department, and having citizenship of the same region help to start and repeat collaborations. Furthermore, authors with different co-authorship network sizes are more likely to collaborate, possibly reflecting synergies between senior and junior staff members.

Worker Mobility and Domestic Production Networks

Abstract: We show that domestic production networks shape worker flows between firms. Data on the universe of firm-to-firm transactions for the Dominican Republic, matched with employer-employee records, reveals that about 20 percent of workers who change firms move to a buyer or supplier of their original firm. This is a considerably larger share than would be implied by a random allocation of movers to firms. We find considerable gains associated with this form of hiring: higher worker wages, lower job separation rates, faster firm productivity growth, and faster coworker wage growth. Hiring workers from a supplier is followed by a rising share of purchases from that supplier. These findings indicate that human capital is easily transferable along the supply chain and that human capital accumulated while working at a firm is complementary with the intermediate products/services produced by that firm.

Mobility under the COVID-19 Pandemic: Asymmetric Effects across Gender and Age

Abstract: Overall mobility declined during the COVID-19 pandemic because of government lockdowns and voluntary social distancing. Yet, aggregate data mask important heterogeneous effects across segments of the population. Using unique mobility indicators based on anonymized and aggregate data provided by Vodafone for Italy, Portugal, and Spain, we find that lockdowns had a larger impact on the mobility of women and younger cohorts. Younger people also experienced a sharper drop in mobility in response to rising COVID-19 infections. Our findings, which are consistent across estimation methods and robust to a variety of tests, warn about a possible widening of gender and inter-generational inequality.

Protecting Lives and Livelihoods with Early and Tight Lockdowns

Abstract: Using high-frequency proxies for economic activity over a large sample of countries, we show that the economic crisis during the first seven months of the COVID-19 pandemic was only partly due to government lockdowns. Economic activity also contracted because of voluntary social distancing in response to higher infections. We also show that lockdowns can substantially reduce COVID-19 infections, especially if they are introduced early in a country's epidemic. Despite involving short-term economic costs, lockdowns may thus pave the way to a faster recovery by containing the spread of the virus and reducing voluntary social distancing. Finally, we document that lockdowns entail decreasing marginal economic costs but increasing marginal benefits in reducing infections. This suggests that tight short-lived lockdowns are preferable to mild prolonged measures.

A Note on the Algebra of Multiple Exchange Rates

Abstract: A system of multiple exchange rates features segmented markets. Segmentation is achieved by the Central Bank categorizing transactions between residents and non-residents according to the exchange rate at which they are liquidated; and, by impeding exchange rate arbitrage through administrative and other controls. Operationally, it requires economic agents to use different accounts for each exchange rate. This paper develops the algebra of multiple exchange rates valid for any country with a multiple exchange rate system. It then applies it to Cuba, showing how its system boils down algebraically to a simple monetary rule, in which the Central Bank picks (i) the parity between the two domestic legal currencies; and (ii) the parity between the convertible domestic currency and foreign currencies, to ensure that foreign exchange reserves are not depleted.

Is Unemployment on Steroids in Advanced Economies

Abstract: Conventional macroeconomic theory is based on the idea that demand shocks can only have temporary effects on unemployment, however several European economies display highly persistent unemployment dynamics. The theory of hysteresis points out that, under certain conditions, demand disturbances can have permanent effects. We find strong evidence of unemployment hysteresis in advanced economies since the 1990s. Relying on an identification scheme instigated by an insider/outsider model, we exploit the heterogeneity in impulse responses to demand shocks to investigate what labor institutions soften or amplify these responses. Our results indicate that strengthening labor institutions that promote a faster adjustment of real wages, removing disincentives for firms to hire and for workers to be employed, and improving the matching between labor supply and demand can lessen the effects of adverse demand shocks and lead to a faster reversion of unemployment rates to pre-shock levels.