Roc Armenter : Research

with Thomas Mertens.

Social and private insurance schemes rely on legal action to deter fraud and tax evasion. This observation guides us to introduce a random state-verification technology in a dynamic economy with private information. With some probability, an agent's skill level becomes known to the planner who prescribes a punishment if the agent is caught misreporting. We show how deferring consumption can ease the provision of incentives.

Review of Economic Dynamics, 13(2), pp.403-423, 2010. With Francesc Ortega.

We ask whether worker mobility has undermined the ability of U.S. states to redistribute income. We build a tractable model where both migration decisions and redistribution policies are jointly determined. Our model features a large number of heterogeneous regions and skilled and unskilled workers with idiosyncratic migration costs.

European Economic Review, forthcoming. With Francesc Ortega.

We analyze the joint determination of income redistribution and migration flows across fiscally independent regions. In our model, regional governments lack commitment so their policy announcements must be credible, and redistribution between skilled and unskilled workers is bounded by informational constraints.

with Stefania Albanesi.

This paper studies the long run properties of intertemporal distortions in a broad class of second best economies. Our unified framework encompasses and extends many well known models, such as variants of the Ramsey taxation model with aggregate or idiosyncratic risk, and economies with incentive compatibility constraints due to limited commitment, political economy, self-enforcement or private information, or combinations of these.

with Stefania Albanesi.

Most Ramsey models prescribe that capital taxes should be zero in the long run (Chamley 1986, Judd 1985). We propose a new argument for Chamley-Judd result that relies on the government's ability to reallocate distortions over time. Our argument translates into the following principle: if it is possible for the government to front-load all distortions, there will be no permanent intertemporal wedge. The principle is very general and applies to a very large class of Ramsey models.

Journal of Public Economics, 92 (10-11), pp. 2275-2281. 2008.

Review of Economic Dynamics, 10(1), pp. 31-54. 2007.