Basile Grassi Wants to Understand How Micro Affects Macro
Is it good or bad for the State to intervene and save an industry that is not doing well? Is it better to save the employees of an inefficient plant or to use the same resources in a different way? These are the questions that Basile Grassi asks himself every day. A macroeconomist and an Assistant Professor at the Department of Economics, he looks for answers by connecting the realms of micro- and macro-economics. "This line of research is new and we are far from developing normative recommendations", he says, "but our final goal is to understand the macroeconomic consequences of sectoral policies".
As the son of a French mathematics teacher, Grassi found it natural to study Mathematics. Pretty quickly he decided to switch to Economics because, he recalls, "Mathematics was fun for my brain, but I was looking for applications to the real world. I wanted to make some kind of impact". After graduating at the École Normale Supérieure de Cachan and the ENSAE (École nationale de la statistique et de l'administration économique), he obtained a MSc and a PhD in Economics at the Paris School of Economics. From 2014 to 2017 he was a postdoctoral researcher at University of Oxford's Nuffield College. In order to attract and retain him in Europe, Bocconi University received a Top-up Fellowship awarded by Unicredit&Universities Foscolo Foundation.
At the core of Grassi's research agenda there is the attempt to understand the micro foundations of the macro phenomena. "This is highly engaging for three reasons. First, it is a new approach. In the last thirty years, the Macroeconomics norm was that macro effects were due to macro causes. This new approach aims to open the black box of the firm and the industry. Second, I deeply believe that the GDP of a country is the sum of its parts: if they are doing well, the whole country is doing well. Third – this is more nerdy – I like the mathematics involved in this field. The approach implies the study of the behavior of millions of firms in order to predict what happens at the aggregated level".
In his most recent paper, temporarily titled IO in I-O: Competition and Volatility in Input-Output Networks, Grassi offers an understanding of how firm level shocks can shape aggregate dynamics. The interaction between the size of the firm, the market structure and the role of the firm in the supply chain determines which firms are important at the aggregate level. These are the pivotal firms the government has to watch in order to stabilize the economy.
Grassi was excited to move to Milan and to join Bocconi. "I was impressed by all the interactions I have had so far", he says. "I had contacts with universities in France, the UK, the US, Norway. Bocconi was by far the most professional one. On top of that, the faculty team is excellent. Talking about my teaching experience, I can't wait to pass on new knowledge to students. After a while, you see that they are thinking in a new way. This is the most rewarding aspect of being a teacher".