Pierfrancesco Mei

Research

Current Research

"Selective Inattention to Interest Rates", with Tim de Silva. Latest draft here.

Abstract: This paper studies whether households are selectively inattentive to interest rates and examines its macroeconomic implications. We first use existing and newly-designed household surveys to establish that households close to durables purchases actively acquire more information about interest rates and have more accurate, less dispersed, and less uncertain interest rate expectations. Next, we use this evidence to calibrate an incomplete markets model with durable consumption and endogenous information acquisition about interest rates through rational inattention. Finally, we quantify how selective inattention changes aggregate consumption responses to interest rates. Relative to exogenous inattention, selective inattention shifts the composition of spending responses to interest rate cuts, accelerates the impact of larger cuts, and generates dampened responses to changes in volatility that are closer to empirical evidence.

"Thinking about the Economy, Deep or Shallow?", with Lingxuan Wu. Latest draft here.

Abstract: We propose a theory of shallow thinking to capture people's limited understanding of the long causal chains involved in shock propagation. We cast general equilibrium as a system of causal relations in a directed cyclic graph. Estimation from our qualitative survey suggests that, on average, people think about only 2.6 steps of propagation, overlooking much of the graph and significantly deviating from rational expectations. Our theory implies that longer causal chains have diminishing influence on beliefs. Applying shallow thinking to a New Keynesian model with active monetary policy reconciles several puzzles about long-term interest rates and inflation: (i) long-term interest rates underreact to cost-push shocks but overreact to monetary policy shocks; (ii) inflation expectations negatively predict bond excess returns; (iii) news about future cost-push shocks triggers inflation; and (iv) more persistent cost-push shocks lead to higher inflation. Notably, (iii) and (iv) contradict the predictions of rational expectations. In a real business cycle model, relative to rational expectations, shallow thinking amplifies and prolongs output fluctuations from productivity shocks and predicts negative future stock excess returns.

"The How and Why of Household Reactions to Income Shocks", with Stefanie Stantcheva and Roberto Colarieti. NBER Working Paper 32191, 2024.

Abstract: This paper studies how and why households adjust their spending, saving, and borrowing in response to transitory income shocks. We leverage new large-scale survey data to first quantitatively assess households' intertemporal marginal propensities to consume (MPCs) and deleverage (MPDs) (the “how”), and second to dive into the decision-making processes across households (the “why”). The combination of the quantitative estimation of household response dynamics with a qualitative exploration of the mental models employed during financial decisions provides a more complete view of household behavior. Our findings are as follows. First, we validate the reliability of surveys in predicting actual economic behaviors using a new approach called cross-validation, which compares the responses to hypothetical financial scenarios with observed actions from past studies. Second, we show that MPCs are significantly higher immediately following an income shock and diminish over time, with cumulative MPCs over a year showing significant variability. However, MPDs play a critical role in household financial adjustments and display significantly more cross-sectional heterogeneity. Third, using specifically designed survey questions, we find that there is a broad range of motivations behind households' financial decisions and identify household types using machine learning methods. Similar financial actions stem from diverse reasons, challenging the predictability of financial behavior solely based on socioeconomic characteristics. Finally, we use our findings to address some puzzles in household finance.

Pre-PhD Research

"Debt and Austerity: International Evidence and the Case of Brazil" (2020), with Alberto Alesina, Cadernos de Finanças Públicas

"The Italian Public Debt" (2019), with Alberto Alesina, Carlo Favero and Francesco Giavazzi, Book Chapter in “Austerity”, Rizzoli

"Austerity and Public Debt Dynamics" (2019), with Carlo Favero, CEPR DP 14072

About

Welcome to my webpage! In May 2025 I obtained a PhD in Economics from Harvard University. I joined Goldman Sachs in New York as a U.S. economist in June 2025.

Harvard

I completed my PhD under the supervision of Professors Andrei Shleifer, Kenneth Rogoff, and Ludwig Straub. During my time at Harvard, I worked as a research assistant for Professors Alberto Alesina, Emmanuel Farhi, Kenneth Rogoff, and Andrei Shleifer. Since 2021, I have been the teaching fellow for the first-year PhD macroeconomics course at Harvard, taught by Professors Robert Barro, Adrien Bilal, Xavier Gabaix, and Ludwig Straub. In May 2023, I was awarded the Harvard GEA Prize for Best Teaching Fellow in the Economics Department.

In 2021, I served as a consultant to the Chief Economic Adviser of the Italian Prime Minister Mario Draghi. During the 2023/24 academic year, I was a Visiting Fellow at the Federal Reserve Bank of Boston. I am also a research fellow in the Social Economics Lab, led by Professor Stefanie Stantcheva at Harvard.

My research has been supported by the Alberto Giovannini UniCredit Scholarship, the Lynde and Harry Bradley Foundation Fellowship, the Molly and Domenic Ferrante Macro Fund, the Michael S. Chae Macroeconomic Policy Fund, and the Federal Reserve Bank of Boston Dissertation Fellowship.

Bocconi

Before joining Harvard, I earned Bachelor's and Master's degrees in Economics from Bocconi University in Milan, where I was supervised by Professor Francesco Giavazzi. Between 2016 and 2019, I worked as a research assistant for Professors Alberto Alesina, Carlo Favero, Francesco Giavazzi, and Stefanie Stantcheva.

I was a visiting student at Princeton University and the Innocenzo Gasparini Institute of Economic Research, as well as an intern at the Financial Times and the Institute for Fiscal Studies in London. In 2018/19, I served as president of the Economic Society, the largest economics student organization at Bocconi.

During my Master's program, I was awarded the Bocconi Graduate Merit Award and the Vittorio Bertazzoni Scholarship.

Contact

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