Stefano Piermattei

Bio: Stefano Piermattei is an academic researcher. The author has contributed to research in topics: Debt & Household debt. The author has an hindex of 4, co-authored 7 publications receiving 90 citations.

Household Debt in OECD Countries: The Role of Supply-Side and Demand-Side Factors

Abstract: In many countries, household debt increased from the 1990s until the global financial crisis of 2007–2008 and then stagnated with the Great Recession, the euro-area sovereign debt crisis and deleveraging. In spite of these common trends, differences in national household debt/disposable income ratios are evident. This paper studies the determinants of household debt using a dataset of 33 countries and taking into account both demand-side and supply-side factors. The econometric exercises, covering the period 1995–2016, yield the following results. First, there is a positive link between household debt and both household wealth and house price growth. Second, the quality of bankruptcy laws relates positively to household debt, whereas longer insolvency resolution times are associated with lower household debt. Third, Anglo-Saxon legal origin and Scandinavian legal origin have a stronger link with household debt than French and German legal origin. Fourth, household debt is higher in countries with social-democratic and liberal welfare models than in conservative and Eastern European welfare states. Fifth, the ratio of public debt to GDP displays a negative association with private debt. Last, the effect of saving on household debt is significant only in the years of household deleveraging, i.e. after the global financial crisis. While the effect of demand-side variables is unstable over time, supply-side variables appear to be more persistent in determining the level of household debt.

The Determinants of Household Debt: A Cross-Country Analysis

Abstract: In most countries household debt increased from the 1990s until the crisis of 2007-2008 before stabilizing due to recession and deleveraging. However, there are national differences in household debt/GDP ratios. This paper studies the determinants of household debt, using a 32-country dataset and taking both demand-side and supply-side factors into account. The econometric exercises, covering the period 1995-2011, yield two main results. First, debt is greater in countries with higher per capita GDP and household wealth. Second, the efficacy of bankruptcy laws is correlated with the level of household debt, while a longer time to resolve insolvencies is associated with lower debt. These two institutional variables are linked to household debt more robustly than is the quality of credit registers.

Discussing Measures of Financial Inclusion for the Main Euro Area Countries

Abstract: Since financial inclusion has become a policy target in many countries, properly measuring it is crucial. Usual indexes of financial inclusion include inappropriate variables and don’t take into account other relevant aspects, thus misrepresenting the phenomenon. In this work we focus on the diffusion of electronic cards, generally not included in the usual indexes of financial inclusion notwithstanding they provide alternatives to usual saving practices and allow less costly transactions across larger markets and wider geographic areas. We show that, taking these instruments into account, the comparative valuation of the degree of financial inclusion between the main euro area countries changes substantially. We also employ survey data to analyze cross-country differences in the degree of financial inclusion and the distribution of multidimensional deprivations of specific sub-groups of populations.

Why do banks use derivatives? An analysis of the Italian banking system

Abstract: The derivatives market has experienced quick growth all over the world in the last two decades. Banks decide to participate in the derivatives market either to hedge against unexpected movements in economic variables or for trading and broker-dealer activities. This paper analyses, by means of multivariate descriptive statistical tools, the determinants of Italian banks’ use of derivatives over a long time horizon (2003-2017) by using quarterly Bank of Italy supervisory data. We find that size and being part of a banking group positively affect banks’ use of derivatives. Moreover, banks mainly employ derivatives for hedging purposes, especially to hedge against interest rate and credit risks. Finally, derivatives represent a hedging alternative to capital and liquidity. Our results are robust to different specifications that take into account the classification of derivatives by purpose (hedging versus trading) and the distinction between dealer versus end-user banks.

Diversifying away risks through derivatives: an analysis of the Italian banking system

Abstract: The derivatives market has experienced quick growth internationally in the last two decades. Banks decide to participate in the derivatives market either to hedge against unexpected movements in economic variables or for trading and broker–dealer activities. This paper analyses the determinants of Italian banks’ use of derivatives over a long time horizon (2003–2017) by using quarterly Bank of Italy supervisory data. We find that size and being part of a banking group positively affect the banks’ use of derivatives. Moreover, these banks mainly employ derivatives for hedging purposes, especially to hedge against interest rate and credit risks. Finally, derivatives represent a hedging alternative to capital and liquidity, while dealers behave differently when involved in the trading activity. We also take some characteristics that delineate the bank’s business model into account. For example, lower dependence on retail deposits or higher exposure to interbank funding are positively associated with the use of derivatives. Finally, we assess the sensitivity of the main determinants of derivatives across different types of crises and normal times. Our results are robust to different specifications that take into account the classification of derivatives by purpose (hedging versus trading).

Gli effetti della legge n. 133 del 2008 sulle assenze per malattia nel settore pubblico

Abstract: This paper assesses the impact of a reform addressing absenteeism in the Italian public sector. When stricter monitoring was introduced together with an average 20% cut in replacement rates for civil servants on short sick leave, sickness absence decreased by 26.4%, eliminating the wedge in absence rates with comparable private sector workers. The impact substantially decreased when a subsequent policy change brought back monitoring to the pre-reform level, while leaving monetary incentives untouched. Results are confirmed by a variety of robustness checks and are not driven by the attenuation of the reform effects over time.

Household Debt and Income Inequality: Evidence from Italian Survey Data

Abstract: Does regional income inequality affect a household’s likelihood of being indebted? This question is addressed by using survey data on Italian households. The analysis shows that inequality in the regional income distribution has a negative effect on the probability of being indebted. In addition, richer households living in regions with greater income inequality have a greater likelihood of being indebted than similarly rich households residing in regions with low income inequality (and vice versa for poorer households). The study suggests that supply factors are more important than demand factors in explaining this result. These findings are consistent with the latest survey-based evidence drawn from US data which suggests that banks may use local income inequality and a household’s position in the income distribution to make inferences about an applicant’s underlying default risk. These results hold after controlling for socio-demographic differences, different types of debt, unobserved household heterogeneity using panel data and a number of robustness checks.

The economic effects of big events: Evidence from the great jubilee 2000 in Rome

Abstract: This paper assesses the short‐ and long‐term economic impact of the 2000 Great Jubilee, the foremost Catholic event occurring every 25 years, on the city of Rome's economy. By applying the synthetic control approach, we find that the value added per capita increases slightly in the short term, whereas in the long term it is not significantly different from what it would have been if Rome had not hosted the Jubilee. However, we do find a significant effect on the employment rate. Consistent with these findings, we document a shift of the local economy toward less productive sectors, such as construction and services requiring lower skills, and an overall productivity loss with respect to the counterfactual scenario. The investment in infrastructure, facilities, and urban refurbishment did not significantly increase housing prices in the long term, with the exception of peripheral residential areas, which experienced an appreciation.