Projects
📃Research Statement
Projects
📃Research Statement
Job Market Paper
Taxing the Untaxable: Cryptocurrencies, Tax Evasion, and Optimal Policy
Presented at KDSA 2025 (Best Presentation Winner Award)
This paper develops a search-theoretic general equilibrium model of money to analyze optimal fiscal and monetary policy when tax evasion is linked to payment methods. In a tax evadable market, a sales tax is automatically collected on monitored electronic money but can be evaded using unmonitored cash. Buyers endogenously choose payment methods, determining the effective tax base. A benevolent Ramsey planner optimizes the sales tax, cash audit intensity, and fiat money growth rate, balancing revenue needs against evasion incentives and distortions. Cryptocurrency splits into centralized exchanges (taxable, with tax pass-through shaped by regulatory clarity; CEX) and decentralized exchanges (where the government does not have the technology to tax; DEX). The policy regime combines regulatory stance and rule clarity, which together affect price risk and the share of transactions routed through CEX. The analysis shows: (i) clear rules raise pass-through and revenue without large evasion; (ii) restrictive cryptocurrency regulations can backfire by shifting flow to DEX and amplifying risk; (iii) revenue collected on CEX is hump-shaped in as regulations tighten; and (iv) credibility matters, since policy surprises that shift the perceived regime reduce future tax capacity. The framework delivers implementable comparative statics and policy mixes tailored to country characteristics.
Privacy Concerns in Digital Currency Adoption
Presented at Summer Workshop on Money, Banking, Payments, and Finance (Federal Board-2024), Midwest Macro Meetings (2024), ESA (2024), SEA (2024), KDSA (2023) (Best Presentation Winner Award)
The digital transformation of money has introduced new dynamics in how currencies are adopted and used, especially concerning privacy. This research investigates the interplay between privacy concerns, transaction histories, and price discrimination in the adoption of new digital currencies. The framework is based on a multiple currency monetary search model where agents’ decisions determine the acceptance and the value of the currencies. Buyers are heterogeneous in their valuations over the goods and sellers have the ability to engage in price discrimination based on transaction histories. Theoretical findings indicate that higher privacy preferences can increase cash usage, however buyers may strategically switch payment methods to avoid future price discrimination by concealing their types. The theory is coupled with laboratory experiments which vary factors such as the value of privacy, the magnitude of the valuation shocks and transaction costs.
On Cross-Border Payments and the Industrial Organization of Correspondent Banking
with Garth Baughman, Cathy Zhang, Ashley Zhao
Presented at the Bank of Canada (2025)
Despite advances in domestic payments arrangements, cross-border payments remain costly and slow. This paper builds a model of cross-border payments where market power in correspondent banking relationships reduces efficiency. We consider two policy experiments: the introduction by one country of an internationally held CBDC, and development of an internationally interoperable settlement system. Both policies can at least attenuate the inefficiencies in cross-border payments, but neither is automatically a complete solution nor are they without difficulties. For an international CBDC, we identify a political economy barrier: banks of the country potentially introducing the CBDC disproportionately suffer losses while benefits tend to accrue to foreign depositors, so a central bank concerned with its domestic banks' profitability may be unlikely to take such an action. Interoperability does not face the same barrier, as benefits accrue more symmetrically, but we argue that technical and other issues inherent to interoperability may be difficult to overcome.
Liquidity, Networks, and Financial Stability: A Model of Monetary Policy and CBDC Flows
Work in Progress
Experimental Evidence on Currency Competition in Integrated Economies
with Marcos Cardozo, Yaroslav Rosokha, Cathy Zhang
Racing to the Edge: AI Development, Alignment, and Catastrophic Risk
When Do Managers Delegate to AI? Task Type, Stakes, and Accountability in Human–AI Assignment
Macroeconomic Policy When Inequality is Taken Seriously
with James Bullard