Ricerc@Sapienza

The understanding of the distributional dynamics has been for long at a center stage in the economic debate. This project will contribute to the renewed involvement of the scientific community in this issue, combining three main branches of the literature: the pro-poor growth literature, the tax evasion literature, the markets dynamics literature.
The first part of the project aims at developing a framework to evaluate the social welfare implications of growth generated by a profile of income streams. Differently from existing contributions, the complete and partial dominance conditions that will be developed will be sensitive to the economic status of individuals and to all the possible changes of a distribution that take place within the overall growth process. The second part of the project aims at providing synthetic measures of pro-poorness. Differently from existing contributions focusing on the impact of growth on transient poverty, our measure will allow to capture the effect of growth on the dynamics of the poor individuals, by considering both the direct effect of growth and the indirect effect of mobility on the distribution. The third part of the project aims at understanding the role of tax evasion in shaping individuals' income streams. Differently from previous contributions focused on cross-sectional and aggregated evaluation of the distributional impact of tax evasion, our framework will allow accounting for this impact in each single part of the distribution and will endorse a dynamic perspective. The fourth part of this project aims at connecting the above-described transmission mechanisms to the dynamics observed in financial markets. We aim at understanding the effect of which distortions, such as those arising from inequality and tax regimes, affect asset prices. We aim at studying methods that allows correcting the way in which equilibrium models of the economy price financial assets using the notion of stochastic discount factor.