* Materials, Technology and Growth: Quantifying the Costs of Circularity (with Z. Mahone)
Many governments have introduced policies intended to reduce material extraction and boost recycling - i.e., to improve circularity. We develop a growth model of directed technical change with material use and recycling to quantify what these policies can achieve. In the US, we find that material dynamics are moving toward greater circularity, but slowly. We find (i) there are significant welfare gains from shifting the economy away from virgin to recycled material use, (ii) current policy is ineffective at doing this and (iii) revenue-neutral policies pairing recycling subsidies with virgin material taxes can deliver welfare gains of up to 1.5%.
Conditionally Accepted, American Economic Journal: Macroeconomics
[WP] (this draft: January 2026)
Some results from this paper are included in the National Academies Report (MSW Recycling in the United States, 2025)
* Laffer Curves in Brazil: The Tax Evasion Effect (with F. Alencar, M. Araripe, M. Correa)
This paper quantifies the impact of tax evasion on the labor-income Laffer curve in Brazil. We develop a heterogeneous-agent model with incomplete markets, progressive taxation, and imperfect tax enforcement. Beyond the well-known arithmetic and economic effects, the model highlights a novel evasion effect – higher statutory rates induce greater concealment of income and reduce effective tax collections. Calibrated to Brazilian data, the model shows that the aggregate Laffer curve peaks at a marginal rate of 25.3%, below the current 27.5%. Tax evasion reduces potential revenue by up to 54% (3.1% of GDP), with losses concentrated among high-income households. A decomposition analysis further reveals heterogeneous responses across income groups, underscoring distributional and policy implications.
Revise and Resubmit
Working Paper #2505, Department of Economics, University of Windsor
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* One Size Fits None: Optimal Taxation of Recyclable Materials (with Z. Mahone and E. Mattos)
Materials policy in the United States and elsewhere treats recyclable materials as a largely undifferentiated category: no material-specific virgin taxes or recycling subsidies and consumption taxes on recyclables are nearly absent. Yet materials are highly heterogeneous in the share of extracted material that is ever usable, in how readily recycled inputs substitute for virgin ones, and in the landfill damage each imposes at disposal. This paper asks whether efficient materials policy requires instruments that vary as much across materials as the materials themselves do. We develop a dynamic general equilibrium model of the material cycle in which a final good is produced from capital, labor, and a menu of materials, each combining virgin extraction and recycling in an endogenously chosen mix, and characterize the material-specific recycling subsidies and virgin material taxes, together with a uniform consumption tax, that implement the efficient allocation as a competitive equilibrium. We calibrate the model separately for five material categories -- ferrous metals, non-ferrous metals, glass, paper, and plastics -- accounting for the majority of U.S. virgin material extraction and municipal solid waste. The resulting heterogeneity is large: the optimal recycling subsidy ranges from 0.89 percent (Non-Ferrous) to 33.66 percent (Ferrous), while the optimal virgin material tax ranges from 4.07 percent (Paper) to 329.78 percent (Plastic); the optimal consumption tax, by contrast, is small and uniform at 0.59 percent. These findings indicate that a single, material-blind instrument cannot approximate the efficient policy for any of the three margins we study, underscoring the need for materials policy to be designed at the level of the material rather than the waste stream as a whole.
* Materials Use, Energy Consumption and Climate Change
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2026 Tri-Success Grant Program, University of Windsor ($5000)