Articles in 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

• 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]

• Coordinating Bank Dividend and Capital Regulation with S. Federico and L. Regis 

Mathematical Finance (forthcoming) [preprint]

Policy papers and 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, Springer

• Towards a Framework for a New Research Ecosystem, with R. Savona et al.

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

Working papers

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

 [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

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.

• Pledgeable Collateral, Dealer Leverage, and Runs with B. Almquist-Lewis and H. C. Dalgic

We show that strengthening creditor rights in the sale and repurchase (repo) market can exacerbate financial instability, particularly under short debt maturities and low collateral volatility. We build a model of financial intermediaries that raise financing by pledging collateral in the repo market. In the short term, increasing collateral pledgeability makes repo creditors safer and reduces debt rollover risk; however, it also expands long-term debt capacity and leverage, ultimately heightening run risk. This instability is a distinct feature of environments with long-term liabilities and lowvolatility assets, where market discipline fails to constrain post-policy leverage. We test our model's predictions by exploiting the 2005 BAPCPA bankruptcy reform, which expanded creditor protections via repo safe harbors. Using hand-collected data on dealer repo collateral, we confirm that while the law enhanced collateral pledgeability, it fueled short-term leverage and precipitated sharper de-leveraging during the downturn. 

• Deposit Guarantees Below and Above Zero with M. Lucchetta

This paper studies how the policy interest rate affects the coverage of the optimal deposit guarantee. We develop a dynamic model in which a bank chooses its dividends and exposure to risky loans. The regulator sets a resolution requirement that determines bank closure and the fiscal shortfall on insured deposits, balancing shareholder value against the social cost of a default. We find an inverted U-shaped relationship between optimal coverage and the policy rate. When the deposit-rate floor binds, higher policy rates raise returns on risk-free holdings without increasing deposit funding costs, supporting broader guarantees. When the floor does not bind, rising funding costs erode bank profitability and increase the social cost of the guarantee, narrowing the optimal coverage.

• Modeling the Distribution of Tax Evasion: Implications for the Tax Gap with T. Dutra

This paper develops a dynamic heterogeneous-agent model in which taxpayers choose between simple and sophisticated evasion under income shocks and enforcement risk. Sophisticated evasion becomes attractive only for high-income individuals who can absorb its fixed cost and exploit legal ambiguities in the tax system, creating a productivity-dependent threshold that shapes non-compliance across the distribution. Calibrated to U.S. data, the model reproduces the aggregate tax gap and its concentration at the top. Simulations show that traditional deterrence tools, such as audits and fines, reduce simple evasion but have little influence on sophisticated evasion, whose incentives are largely insulated from enforcement intensity. As a result, the remaining tax gap becomes increasingly composed of sophisticated, harder-to-detect behavior among high-income taxpayers. Greater income dispersion expands the set of individuals for whom sophisticated avoidance is accessible, which flattens the fiscal-capacity (Laffer) curve and lowers the revenue-maximizing tax rate under imperfect detection. These findings highlight that effective policy must target the mechanisms that allow avoidance to appear legitimate, such as legal ambiguity or insufficient fine-enforcement credibility, rather than relying solely on traditional deterrence instruments.

Selected 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]

• Runs, liquidity backstops and payouts, with G. Ferrari and L. Regis [first draft coming soon]

We develop a continuous-time model of a financial firm in which equity holders' dividend payouts and creditors' rollover decisions are jointly determined in equilibrium. We characterize the dividend-rollover equilibrium in closed form and establish conditions for its existence and uniqueness. We then use the model to study the optimal design of liquidity support. The payout and run thresholds interact through a feedback loop: liquidity-providing policies that relax run incentives simultaneously lower the payout threshold, eroding the capital buffers they aim to protect. We show that coordinating dividend restrictions with liquidity support can internalize this feedback and mitigate the adverse effect of liquidity provision, though it redistributes value from equity holders to debt holders. The optimal policy depends on debt maturity and the reliability of liquidity facilities. 

Permanent working papers

• Financial Frictions and Non-linear Dynamics in Continuous-time Macro-finance Models

[last revisited 06.10.2023]

This paper provides 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 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.