Working Papers


[Presentations:  5th Sailing the Macro Workshop Ortygia, University of Naples Federico II, Erasmus University Rotterdam, 7th Annual CefES Conference, 4th XAmsterdam Macroeconomic Workshop (co-author), Theories and Methods in Macroeconomics 2025 (co-author)] - Submitted


Abstract: We study how revenue-neutral corporate tax reforms affect aggregate investment, productivity, and welfare in a heterogeneous firm model. Along the revenueneutral schedule of rates and deductions, we show that a high-rate, high-deduction regime generates more aggregate investment and higher welfare than a low-rate, low-deduction one. More generous deductions act as an investment subsidy that benefits small to medium-large firms, which invest intensively relative to their size, and thereby foster capital accumulation despite the higher tax rate. However, the same mechanism reallocates capital away from the largest and most productive firms, reducing aggregate productivity. An event study exploiting firm-level variation in exposure to a 2005–2007 Dutch reform supports our model’s key mechanism.


[Presentations:  Erasmus University Rotterdam, Society for Economic Dynamics 2024 (co-author), Leicester University (co-author), 11th Summer Workshop on Macro Finance (co-author)] - Submitted


Abstract: This paper investigates how rising overhead costs of production affect market outcomes across sectors with different degrees of input complementarity. Using Dutch administrative firm-level data from 2006–2018, we document sectoral heterogeneity in markups’ dynamics, which we attribute to variations in ICT investment. We estimate the elasticity of substitution between capital and labor, finding stronger complementarity in sectors that invest more in ICT. A two-sector model with heterogeneous firms and oligopolistic competition shows that higher overhead costs reduce the number of firms able to break even, leading to a contraction in output, lower wages and marginal costs. In sectors with stronger complementarity, lower wages translate into larger marginal cost reductions, boosting profits and markups while reducing the labor share. The model replicates key empirical patterns, including asymmetric markups’ growth—explaining 37% of the increase in ICT sectors and 43% in non-ICT.


Work in Progress


[Winner of the Modigliani Research Grant 2025]

[Press Coverage: Ateneapoli n.4 anno 41 (in Italian)]


[First draft soon! Slides available upon request]