Published articles

• 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 (forthcoming) - [preprint] [replication package]

Book chapters (peer-reviewed)

• 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

• The Equilibrium Effects of Mortality Risk, with L. Regis and G. Rizzini - R&R@JEBO (Journal of Economic Behavior & Organization)

In this paper, we investigate how mortality risk affects agents' optimal decisions and asset prices within a general equilibrium framework. In our model, risk-averse households facing a stochastic mortality rate allocate their net worth among consumption, risky capital production, and risk-free bonds to maximise intertemporal utility. In this setting, we show that a negative and time-varying correlation exists between mortality and risky asset prices, even when production and mortality risks are mutually independent. The correlation arises because higher mortality rates reduce the incentive to save for the future, leading to increased current consumption and decreased capital investment. As a result, higher mortality lowers the prices of risky capital and raises the risk-free rate in equilibrium. Calibrated simulations suggest that endogenous price effects account for the largest share of welfare gains and losses following sharp changes in mortality, such as pandemics or rapid increases in longevity.

• Coordinating Dividend Taxes and Capital Regulation (2024) with S. Federico and L. Regis - R&R@MF (Mathematical Finance)

In this paper, we examine how dividend taxes (and bans) and capital requirements that vary with the state of the economy influence a bank's optimal capital buffers and shareholder value. In the model, the bank distributes dividends and issues costly equity to maximise shareholder value, while its assets 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. Imposing dividend taxes (or bans) in bad macroeconomic states generates an intertemporal trade-off, as it encourages capital buffers accumulation in those states but promotes dividend payouts in the good ones. Furthermore, the policy undermines financial stability by reducing the bank's value and weakening its incentives to recapitalise in both good and bad states. Coordinating dividend taxes with counter-cyclical capital requirements can mitigate value losses and ease the trade-off, but it also exacerbates disincentives for recapitalisation.

• Inefficient Bank Recapitalisation, Bailout, and Post-Crisis Recoveries (2020)  - 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 

Permanent working papers

• Financial Frictions and Non-linear Dynamics in Continuous-time Macro-finance Models (2023)  - 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.