Matteo Maggiori Finance

Matteo Maggiori is a prominent figure in the field of international finance and macroeconomics, known for his rigorous empirical work and insightful contributions to understanding exchange rates, capital flows, and global imbalances. Currently a Professor of Finance at the Stanford Graduate School of Business and a Senior Fellow at the Stanford Institute for Economic Policy Research (SIEPR), Maggiori’s research has significantly impacted both academic discourse and policy discussions.

A central theme in Maggiori’s research revolves around the “global safe asset” role of the U.S. dollar. He has extensively studied how the dollar’s unique position as a reserve currency influences international financial markets and macroeconomic stability. His work highlights the demand for safe and liquid assets, particularly U.S. Treasury securities, from foreign investors, including central banks and sovereign wealth funds. This demand, he argues, contributes to lower U.S. interest rates and persistent current account deficits, a phenomenon often referred to as the “exorbitant privilege.” Through meticulous data analysis, Maggiori and his co-authors have demonstrated the magnitude and persistence of these effects.

Maggiori’s research frequently employs novel data sources and econometric techniques to tackle complex questions in international finance. He has pioneered the use of granular micro-level data, such as individual transaction-level data on foreign exchange trades and security holdings, to identify patterns and relationships that are often obscured in aggregate data. This “micro-to-macro” approach allows him to test established theories and uncover new insights into the behavior of financial institutions and markets.

Another key area of Maggiori’s research is the study of exchange rate dynamics. He has investigated the factors that drive exchange rate movements, including trade flows, capital flows, and monetary policy decisions. His work has challenged conventional wisdom by showing that deviations from purchasing power parity (PPP) are not simply due to transaction costs or measurement error, but rather reflect fundamental differences in financial market conditions and risk preferences across countries. He also has studied the impact of exchange rate policies, such as currency pegs and managed floats, on macroeconomic performance.

Beyond his academic contributions, Maggiori actively engages with policymakers and practitioners. He serves as a research affiliate at the Centre for Economic Policy Research (CEPR) and the National Bureau of Economic Research (NBER), and he frequently presents his research at central banks and international organizations. His expertise on international finance and global imbalances is highly sought after, and his work has been cited extensively in policy reports and media articles. By bridging the gap between academic research and real-world policy, Matteo Maggiori is helping to shape the global financial landscape.