Bank Recovery and Resolution planning, Liquidity Management and Fragility. (with Ettore Panetti). Submitted. PDF
Abstract. Do banks manage liquidity against financial fragility? To answer this question, we study an economy where banks undertake maturity transformation and insure their depositors against idiosyncratic and aggregate shocks. Moreover, strategic complementarities might trigger depositors’ self-fulfilling runs, modeled as "global games". During runs, if depositors' risk aversion is sufficiently high, the banks engage either in liquidity hoarding when the productive asset in portfolio is sufficiently liquid, or in liquidity cushioning when it is sufficiently illiquid. Ex ante, if the probability of the idiosyncratic shock is sufficiently large, banks hold extra precautionary liquidity, and narrow banking is not viable.
Market power and welfare effects of immigration. With Gianfranco Atzeni, Marco Delogu, and Dimitri Paolini. PDF
Abstract. We analyze the effects of migration allowing for endogenous labor supply in a standard two-region model with monopolistically competitive producers and love for variety. We find that the welfare effects of migration depend on firms’ market power in the final good markets. If market power is sufficiently high, migration of low-skill individuals positively affects the welfare of native high skill individuals in the destination region, while low skill individuals are unaffected. Natives of the origin region are always better off, irrespective of their skills. Differently, if market power is sufficiently low, low skill migration makes both high and low individuals native of the destination region better off.
Determinants of politicians' party loyalty. With Fabio Cerina and Andrea Caria. In progress.
Financial frictions and business formation in the US economy. With Miguel Casares and Jose Enrique Galdon.
Skill premia, education race and the credit market. With Dimitri Paolini. In progress.