Research
Publications/Under Review
A Heterogeneous Agent New Keynesian Model of Search Frictions and Public Sector Employment(published version, 2025 version, online appendix)
Abstract: I study how public sector employment affects aggregate output and employment. Although accounting for approximately 25% of the labour force in modern economies, the macroeconomic effects of public sector employment remain largely underexplored. I build a Heterogeneous Agent New Keynesian (HANK) model with unemployment risk, endogenous job destruction, sluggish vacancy creation, and public sector employment. This is the first HANK model that studies this fiscal tool, allowing me to capture key labour dynamics and assess their joint role with unemployment risk in shaping the effectiveness of policy shocks. Calibrated to France, the model shows that public sector employment lowers unemployment and increases aggregate output with multipliers above unity, driven by (i) stronger demand, (ii) labour frictions limiting crowding out, and (iii) reduced unemployment risk –effects that decline in the absence of labour and nominal frictions, and disappear in a representative agent setup. Finally, compared to an increase in benefits, public sector employment is more effective in stimulating economic activity and welfare.
Democracy and Taxation(published version)
Abstract: In this paper, the author argues that democracies increase tax revenues, based on the hypothesis that democracies increase direct and indirect taxes due to increased taxpayers’ compliance, diffusion of taxes between democracies and because voters in poor democracies are in favour of import taxes. The author tests this hypothesis using data on 74 countries from 1993 to 2012. His explanatory variable is a dichotomous democracy measure, but he alters his analysis from previous research by assuming that democracy is not an exogenous variable. Instead, he uses the theory of Huntington (The third wave: Democratization in the late twentieth century, 1991) and the methodology of Acemoglu et al. (Democracy does cause growth, 2014) about democratization waves. According to this theory, democratizations occur in regional waves; consequently, diffusion of demand for or discontent with a political system is easier to happen in neighbouring countries due to economic, political and historical similarities. This measure shows us that demand for or discontent with a given political system in a geographical area, influences a country’s political system and its tax choices. Using a 2SLS fixed effects model the author finds that democratization waves positively affect democracy, and in turn democracy increases direct and indirect taxes. These results remain the same using several robustness tests.
Working Papers/ Work in Progress
The Role of Public Sector Employment Under Persistent Unemployment (Draft Available Upon Request)
A Multi-Country, Multi-Sector Model with fiscal, energy and environmental features (Joint work with Massimo Giovannini)