Meet Gualtiero Azzalini: a SHoF Researcher Unveiling How Income Risk Shapes Inequality and the Economy

mar. 05, 2024

Gualtiero Azzalini is one of Swedish House of Finance’s (SHoF) latest additions to its research team. He studies macroeconomics, household finance, and at their intersection. In his research, Azzalini analyzes microdata to uncover new empirical insights, laying the groundwork for theoretical frameworks and employs models to both explain and quantify real-world phenomena, offering valuable policy recommendations.

The broader aim of his research is to tackle the following questions:

• What are the mechanisms underlying the formation of income risk?

• What are the properties of income risk? What can be learned about them from individuals’ savings and portfolio allocation choices?

• What is the impact of different types of income risk on the macroeconomy and on wealth inequality?

In his study "Business cycle asymmetry of earnings pass-through," Azzalini looks into how the sharing of financial risks between workers and businesses leads to uncertainty in income. His research "Inferring income properties from portfolio choices" reveals that the choices people make in their investments can provide insights into this income uncertainty. Alongside Markus Kondziella (University of St. Gallen) and Zoltán Rácz (Stockholm School of Economics), in "Preference heterogeneity and portfolio choices over the wealth distribution," he shows how differences in people's preferences and investment choices can explain the differences in wealth.

“Income risk plays a central role in my research,” Azzalini says. “It is indeed one of the main determinants of agents’ economic choices, like consumption, investment, portfolio allocation, and by studying it one can derive policy implications of paramount importance.”

Azzalini is also Assistant Professor in Finance at the Stockholm School of Economics. He received his Ph.D. from the Institute for International Economic Studies (IIES) at Stockholm University.