Articles on refereed journals

• Risk Pooling, Intermediation Efficiency, and the Business Cycle, with P. Dindo and L. Pelizzon

 Journal of Economic Dynamics and Control, Volume 144 (2022),104500 - [preprint]

• Capital Risk, Fiscal Policy, and the Distribution of Wealth, with L. Regis 

       Mathematics and Financial Economics, Volume 18, Issue 1 (2024), 1-33  - [preprint]

• Dynamic Tax Evasion and Growth with Heterogeneous Agents, with F. Menoncin

 Journal of Economic Interaction and Coordination, Volume 20 (2025), 643-658

• Towards a Framework for a New Research Ecosystem, with R. Savona, C. M. Alberini, L. Alessi, I. Baussano, P. Dellaportas, R. Guerra, S. Khozin,  S. Pecorelli, G. Rasi, P. D. Siviero, and R. M. Stein

Humanities and Social Sciences Communications, Volume 12 (2025), 1044

• Tax Evasion and the Productivity Distribution, with F. Menoncin and L. Regis

Economic Modelling, Volume 157 (2026), 107480 - [preprint] [replication package]

• The Equilibrium Effects of Mortality Risk, with L. Regis and G. Rizzini

Journal of Economic Behavior and Organization, Volume 243 (2026), 107463- [preprint]

Book chapters (refereed)

• Shadow Economy and Corruption, with R. Levaggi and F. Menoncin

In New Perspectives in the Public and Cultural Sectors (2025), 311-330,  edited by C. Guccio, I. Mazza, and G. Pignataro, Springer

Working papers

• Coordinating Bank Dividend and Capital Regulation with S. Federico and L. Regis - R&R (2nd round)

[new version! 19.03.2026]

This paper examines how state-dependent dividend restrictions (taxes and bans) and capital requirements influence a bank's optimal capital buffer accumulation and risk-taking decisions. In the model, the bank distributes dividends and issues costly equity to maximise shareholder value, while its loans generate stochastic income under time-varying macroeconomic conditions. We solve the bank's stochastic control problem and derive the distribution of its capital buffers in closed form. Binding dividend restrictions in bad macroeconomic states increase capital retention but shift dividend payouts toward good states and reduce shareholder value. The resulting value losses weaken incentives to inject new equity following adverse income shocks. Dividend shifting and weaker recapitalisation incentives increase the dispersion of the bank's long-run capital-buffer distribution. Coordinating dividend restrictions with counter-cyclical capital requirements mitigates value losses in bad states and capital-buffer dispersion, but lowers shareholder value in good states and further weakens recapitalisation incentives. When the bank is allowed to optimally reduce its  lending in bad states, the additional capital buffers induced by dividend restrictions mitigate the reduction by weakening its precautionary motive.

• Inefficient Bank Recapitalisation, Bailout, and Post-Crisis Recoveries - under revision

 [last revised: 01.08.2023] - [slides] 

We study bailouts in a macroeconomic model where banks provide services that facilitate firms' investments but limit their leverage to prevent costly recapitalisations. This precautionary motive can generate financial crises, in which banks' limited intermediation capacity discourages investments and dampens growth. Bank recapitalisations are constrained-inefficient because they do not internalise that, in the aggregate, higher equity buffers allow for more intermediation, favouring investments and accelerating recoveries. System-wide bailouts can mitigate this inefficiency and improve long-run welfare as long as their positive effect on banks' equity value outweighs their negative impact on risk-taking incentives.

• May Tax Evasion Help Control Public Debt?, with R. Levaggi and F. Menoncin - under revision

This paper examines the impact of tax evasion on public debt in a dynamic general equilibrium model with incomplete financial markets. In our model, utility-maximising entrepreneurs optimally choose how much to invest in safe government bonds and risky capital production, as well as which percentage of their income to evade. If evasion is audited, a fine must be paid. The government funds non-productive spending through income taxes and debt. Evasion enables entrepreneurs to accumulate more capital, thereby reducing their need to save for unexpected events. In equilibrium, fewer savings mean fewer investments. This lowers economic growth and increases the cost of borrowing for the government, ultimately raising the debt-to-GDP ratio. Nevertheless, when we compare a reduction in the tax burden achieved through a higher tolerance for tax evasion with a reduction in the legal tax, we show that the first strategy leads to a smaller increase in the debt-to-GDP ratio. This is because, unlike tax evasion, legal tax cuts directly increase the return on capital investments, thereby raising the government's borrowing costs in equilibrium.

Work in progress

• Optimal Dynamic Portfolios Under R&D Investment Risk, with R. Savona [first draft coming soon]

• Risk and Term Premiums in Intermediary Asset Pricing Models with E. Melissinos [first draft coming soon]

• Dividend and Liquidity Regulation with Rollover Crises, with G. Ferrari and L. Regis [first draft coming soon]

• Modelling the Distribution of Tax Compliance with T. Dutra [first draft coming soon]

• Recursive Monte Carlo Solutions of Continuous-Time Models  with I. Gallo 

• Pledgeable Collateral, Dealer Leverage, and Runs with B. Almquist-Lewis and H. C. Dalgic [first draft coming soon]

We show that changes to collateral bankruptcy protection in wholesale funding markets have counterintuitive implications for financial stability. We build a model of financial intermediaries that can raise financing by pledging collateral in the sale and repurchase (repo) market. In the short-term, increasing collateral pledgeability makes repo creditors safer and reduces run risk, but in the long-term, it expands debt capacity and leverage, increasing run risk. We show that this result is a feature of short-term debt backed by low-volatility assets: when liabilities are long-term and the asset has high volatility, market discipline leads to lower leverage post policy. Hand-collected data on dealer repo collateral confirms that BAPCPA’s creditor right strengthening increases pledgeability of collateral, which drives an increase in short-term leverage and larger de-leveraging in a downturn, consistent with a bank run. 

Permanent working papers

• Financial Frictions and Non-linear Dynamics in Continuous-time Macro-finance Models - Previously R&R@DEF (Decisions in Economics and Finance) 

[last revisited 06.10.2023]

 We provide a technical overview of the modelling foundations and the core mechanisms proposed in the recent macro-finance literature, which introduces financial frictions in the form of restricted market participation and occasionally binding leverage constraints in continuous-time general equilibrium models. This class of models is particularly relevant because it can reproduce, in a very tractable framework, the highly non-linear dynamics that associate variations in financial intermediaries' balance sheets with the manifestation of complex phenomena such as time-varying risk premiums, business cycle fluctuations, and economic instability. To complement the survey, we review useful tools from continuous-time optimal control theory to tackle these models and discuss their advantages relative to their discrete-time counterparts.