The Bajola Parisani Chair


The Bajola Parisani Chair in Economics and Institutions is partially funded by the Fondation Bajola Parisani, created by the late Ms Maria Celeste Bajola Parisani with the goal of supporting worthwhile initiatives for the young in the fields of education and health. The Chair initially was held on a rotating basis by two world-known economists, Luigi Pistaferri (from Stanford) and Hugo Hopenhayn (from UCLA). Since 2014 the Chair is held, on a permanent basis, by another well established and influential economist, Claudio Michelacci.

He is a Research Fellow at CEPR, was previously full professor at CEMFI and has held visiting appointments at MIT, University of Southern California, the London School of Economics and the University College London. His research focuses on the functioning of labor markets, the analysis of business cycles, the determinants of the Italian productivity slow down and regional disparities. In these fields, he has edited books, organized academic conferences, and published several articles in top academic journals. He has participated in several research projects funded by the European Research Council, the Spanish Minister of Economics and the Ramon Areces Foundation.

He has been Editor of the Journal of the European Economic Association and the Spanish Economic Review. He has been member of the European Standing Committee of the Econometric Society and he is currently serving in the Executive Committee of the European Economic Association.

He has been a driving force behind the launch of the Rome Master Economics (RoME), which he currently directs (together with Pietro Reichlin, from LUISS University), and of the Rome Economics Doctorate (RED), a PhD program that completes the graduate track starting with the RoME program. These initiatives are a token of his dedication to nurture the younger talents.


Several important economic variables (such as wages, wealth, consumption, and unemployment duration) vary over the life cycle and the business cycle. This suggests that workers' incentive to search for a job as well their ability to cope with unemployment risk also vary over these cycles. The chair holder has emphasized that workers of different age should be protected differently against unemployment risk and has studied the optimal design of stabilization polices and labor market institutions emphasizing the benefits of combining unemployment insurance with employment protection.

His resent research has focused on how bureaucratic inefficiency has caused the Italian productivity slow-down, emphasizing that the rule of law and well-functioning institutions require the drafting of laws that should be simple and concise, avoiding unnecessary elements and leaving no uncertainty in the mind of the reader. The link between the quality of laws and the functioning of institutions is a novel, and so far overlooked reason why institutions that start efficiently then deteriorate, offering new insights into how public bureaucracies become dysfunctional. The theory provides new insights on the Italian productivity decline and has implications for any modern economy that relies on a functional state to provide essential services and implement policy.

Recently published and forthcoming papers

"Ambiguity Aversion and Heterogeneity in Households' Beliefs" Claudio Michelacci and Luigi Paciello, American Economic Journal: Macroeconomics, forthcoming.

"The Extensive Margin of Aggregate Consumption Demand" (with Luigi Paciello and Andrea Pozzi), Review of Economic Studies, 89(2), 909–947, 2022 [Online Appendix].

"From Weber to Kafka: Political Instability and the Overproduction of Laws" (with Gabriele Gratton, Luigi Guiso and Massimo Morelli), American Economics Review, 111 (9), 2964-3003, 2021 [Online Appendix].

"Ambiguous Policy Announcements" (with Luigi Paciello), Review of Economic Studies, 87(5), 2356–2398, 2020.

"Are They All Like Bill, Mark, and Steve?The Education Premium for Entrepreneurs" (with Fabiano Schivardi), Labor Economics 67, 1019-33, 2020.

"Labor Supply with Job Assignment under Balanced Growth" (with Josep Pijoan), Journal of Economic Theory, 2015.

"Optimal Life Cycle Unemployment Insurance" (with Hernan Ruffo), American Economic Review, 2014 [Appendix]

Projects under way

A number of projects are still in progress; interim results have been circulated as working papers. They cover several areas of research including the determinants of the Italian productivity slow down, the analysis of the effects of monetary policy in low interest rate environments, the determinants of regional disparities in Italy and the productivity costs of the excessive production of laws.

“The Economic Costs of Ambiguous Laws” (with Tommaso Giommoni, Luigi Guiso, Massimo Morelli), mimeo, EIEF, 2022.

“Skill Premium and the Local Supply of Skill” (with Tommaso Giommoni, Luigi Guiso, Massimo Morelli), mimeo, EIEF, 2022.

“Overborrowing in the South and the North” (with Luigi Paciello), mimeo, EIEF, 2021.

“Sorting of Customers and Firm Market Power” (with Lianghie Wu), mimeo, EIEF, 2021.

“Ambiguity Aversion and Heterogeneity in Households' Beliefs” (with Luigi Paciello), CEPR & EIEF Working paper, R&R American Economic Journal: Macro, 2019.

“Are housing prices too low?” (with Andrea Pozzi), CEPR & EIEF Working paper, 2019.

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