Working Papers

Bank Branching and Bank Runs in the United States, 1920–1933 Paper
In this paper, I investigate the relationship between bank branching and bank runs and other distress events in the United States between 1920 and 1933. I first develop a model showing that branch banks are less likely to experience liquidity crises in normal times but more likely to experience them in the presence of systemic shocks. Branch banks, in fact, optimally reduce their holdings of liquid assets in response to deposit diversification, making them more vulnerable to highly correlated liquidity shocks. I then construct a novel dataset of national bank branches and complement it with existing distress-event and balance-sheet data. I use the assembled data to test the predictions of the model. Overall, the results of the empirical analysis are consistent with the theory and help reconcile the mixed findings in the literature. Specifically, branching is associated with a lower likelihood of distress events between 1920 and 1929, but with a higher likelihood during the early years of the Great Depression.

The Effects of Tax Enforcement on Average Firm Size and Aggregate Productivity Paper Appendix
How does tax enforcement affect average firm size and total factor productivity (TFP)? To answer this question, I develop a quantitative model with informality where informal entrepreneurs do not pay taxes but face a probability of detection increasing in firm size. Stricter tax enforcement results in lower informality and affects average firm size and TFP through two mechanisms: as tax enforcement becomes stricter, fewer relatively unproductive agents choose to be entrepreneurs, and fewer entrepreneurs choose to operate in the informal sector. I calibrate the model using Brazilian data. A counterfactual tax enforcement reducing the informality rate by 6 percentage points accounts for 9% and 28% of the observed differences in TFP and average firm size between Brazil and a weighted average of the six largest other Latin American economies.

Measuring Informal GDP Using Survey Data Paper
This paper estimates the share of informal GDP in 26 developing countries over a period that spans up to 2004–2023. The focus is on the concept of legal informality, defined as the activities of enterprises that are not formally registered. I propose a simple framework that formally characterizes informal GDP. I use data from various sources, including the World Bank Enterprise Survey and the International Labour Organization (ILO), to match the conditions derived from the framework. The resulting informality series conform to patterns documented in previous research, such as a negative correlation with GDP per capita and mild anticyclical behavior. Because I adopt a narrower definition of informality, the estimated levels tend to be lower than those reported in previous cross-country studies.