LBS Celebrates Winners of International Association for Applied Econometrics Award

London Business School is proud to announce that Daniele Colombo, a PhD student in Economics, has been named co-winner of the 2025 Best Paper Award from the International Association for Applied Econometrics (IAAE). He shares the award with Francesco Toni of the Sant’Anna School of Advanced Studies for their joint paper, Understanding Gas Price Shocks: Elasticities, Volatility, and Macroeconomic Transmission.

The paper investigates how natural gas prices respond to supply and demand shocks in both the Euro Area and the United States. Demand shocks are identified using unexpected temperature changes, while supply shocks are traced using real-time analysis of market-relevant news. This innovative approach allows the authors to estimate the flexibility, or "elasticity", of gas markets and track how price changes impact broader economic conditions.

Their findings show that gas demand in the Euro Area is slower to adjust than in the U.S., making the region more vulnerable to supply-driven inflation. The study also reveals that inflationary effects are amplified by stockpiling behaviour and market volatility, suggesting that expectations and uncertainty play a central role in the transmission of shocks. While the overall macroeconomic impact is moderate, certain sectors are significantly more exposed to these price swings.

LBS Professor Paolo Surico is Daniele's PhD coordinator, supporting him with the development of his paper with Francesco Toni. Speaking about the IAAE award, Professor Surico said: "Daniele’s work with Francesco reflects the very best of LBS scholarship: technically strong, innovative, and directly relevant to pressing economic challenges. It’s a remarkable achievement at this stage in his career.”

Hélène Rey, Professor of Economics at LBS and Daniele's supervisor, praised the work, saying: “This paper stands out for its careful empirical strategy and timely subject matter. Colombo and Toni provide important insights into how energy price shocks affect inflation and economic activity, especially in a time when energy markets are central to policy debates. Their work is a model of applied econometrics at its best and fully deserving of this recognition.”

The IAAE Best Paper Award is presented annually to outstanding research that advances the field of applied econometrics with rigorous analysis and real-world relevance.