Job market candidate
Tel. +34 93 542 2527
Available for Interviews at :
European Job Market for Economists December 6-7, Naples, Italy
Allied Social Science Associations (ASSA), January 4-6, Atlanta, US
Macroeconomics. Fiscal Policy. Monetary Policy. Financial Frictions.
"Social Security and Inequality in Segmented Financial Markets" (Job Market Paper)
Limited asset market participation is a well-known stylized fact and a widespread phenomenon even in developed economies. While existing models have already examined the effects of social security and its reforms on welfare and inequality, little attention has been devoted to the role of public pensions in the context of limited asset market participation. I develop a quantitative overlapping generations general equilibrium model where heterogenous agents face a financial friction limiting access to capital markets. I examine how, in presence of the market imperfection, a public pay-as-you-go system affects consumption and wealth inequality and compare the results with a standard model that does not account for limited asset market participation. In a second exercise, I study the implications, in terms of inequality, of an increase in the retirement age in response to a population ageing shock. I find that limited asset participation is important for the analysis of the impact of social security on overall inequality and on inequality within age groups.
Research Papers in Progress
"Demographics and Low Rates in the Eurozone: the Role Played by the Pension System" (joint with Jacopo Bonchi)"
Demographic trends in the Eurozone point to a lower population growth rate and an higher life expectancy. On the one hand, these trends increase the weight of middle-aged cohorts with a high stock of savings in the population pushing interest rates down (Baldwin and Teulings, 2014; Gottfries and Teulings, 2015; Lu and Teulings, 2016). On the other hand,they undermine the financial sustainability of the PAYG pension scheme forcing European countries to raise the age of retirement and support complementary (private) pension schemes (e.g. Italy, France and Germany). The aim of this work is to study how these reforms affect interest rates. In particular, we want to investigate the existence and the quantitative relevance of an additional effect of demographics on interest rates mediated by the pension system. To fully understand the mechanism through which pension reforms affect interest rates, we first build an OLG model with three generations and population growth. Then, we measure the impact of pension reforms on the real interest rate in the Eurozone through a quantitative model along the lines suggested by Eggertsson et al. (2017).
“Optimal Monetary and Fiscal Policy in a Model with an Underground Sector”
This paper investigates the relation between the size of the underground sector of developing economies and the optimal monetary and fiscal policy mix necessary to fund a given stream of government expenditure. Due to the limited ability to measure the scope and size of informality, the vast majority of research in this literature assumes that the size of the underground sector is exogenous and invariant to policy decisions. In this paper I model the decision of heterogenous firms to operate in the formal sector and pay the sales tax or to conceal their activities and evade taxes. Producing informally involves running the risk of getting caught by the authorities and therefore losing profits. By assumption, the probability of being sanctioned is an increasing function of the amount of capital employed in production. As a consequence, informal firms adopt a sub-optimal capital-labor ratio to reduce the risk of getting caught. The government faces multiple trade-offs when choosing the optimal mix of sales and inflation tax to finance its expenditure. In fact, higher sales taxes push more firms to evade taxes and adopt inefficient technologies, whereas a higher inflation tax increases the transaction cost associated with the consumption of the representative household. The policy mix that solves the Ramsey problem crucially depends on the firms' productivity distribution.