SELECTED WORK IN PROGRESS

_{1- A Continuous-time Theory of Currency Substitution.}

_{Abstract: We analyze the coexistence of cash (fiat money) and privately-issued currencies (crypto-currencies) in a dynamic model where all factors of production are paid in fiat money. This introduces a cash-in-advance constraint that affects both consumption and investment, leading to non-neutrality of money. Crypto-currencies add distortions through labor reallocation and transaction fees. Using flexible utility specifications, we explore the impact of substitutability between money and crypto-purchased goods. Our main result is that an increase in the money supply raises inflation and shifts labor allocation, affecting growth dynamics. While broader economic variables remain stable, real wages are highly sensitive to changes in consumer preferences and crypto-fees, underscoring the impact of private digital currencies on the economy’s long-term trajectory.}

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_{2- Currency Competition and Monetary Non-neutrality (with Simone Valente).}

_{Abstract: We build a theoretical model where both fiat money and crypto-currencies are used as media of exchange for differentiated goods. Crypto-currencies offer pecuniary benefits, such as avoiding consumption taxes, and non-pecuniary benefits like transaction privacy, while non-users face utility losses that grow with available goods. We identify an endogenous threshold good where consumers are indifferent between government-backed money and privately-issued currency, leading to three equilibrium scenarios: all goods purchased with fiat, all with crypto, or a mix of both. Our model predicts that, while fiat money is neutral, crypto-currencies are non-neutral due to mining costs, which affect labor allocation. *}

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_{*3- Can Firms’ Reports Improve Forecasts During Times of Large Shocks? (with Andrea Calef). [ Draft available upon request].}

_{Abstract: Building on the approach of Bybee et al. (2024), which utilizes textual analysis of business news to forecast macroeconomic dynamics, this paper explores the potential of firm-level reports to improve forecasts during times of large economic shocks. We propose a framework that incorporates corporate filings, financial disclosures, and firm communications into traditional macroeconomic forecasting models. By employing a text-augmented Vector Autoregressive (VAR) model, we demonstrate the incremental role of firm-level narratives in enhancing forecasts of key economic variables, such as GDP and inflation, particularly during periods of significant disruptions. Our analysis reveals that sentiment extracted from corporate reports provides early signals of economic shifts, complementing traditional indicators and improving the robustness of forecasts. The results show that firm-specific data can serve as a valuable tool for anticipating changes in the business cycle, particularly in volatile environments, adding a new dimension to forecasting accuracy in the face of large shocks.}

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_{4- Information Disclosures and Price Movements: A High-Frequency Identification Approach (with A. Calef and G. vecchio).[ Draft available upon request].}

_{Abstract: We constructed a cross-sectional dataset comprising filings from 10,000 corporations in the United States, sourced from the Securities Exchange Commission historical archives, to examine how firms’ information disclosures affect equity prices. Traditionally, the efficient market hypothesis posits that essential information is inherently reflected in asset prices. Our dataset includes each firm’s risk assessment and descriptions of investments, including future strategic decisions. We align this textual data with high-frequency equity prices to assess market absorption of information. Specifically, we investigate price movements in a 30-minute window surrounding report releases. Our preliminary findings indicate that the market effectively predicts financial information related to new projects and strategic investments. However, managerial decisions often surprise the market, leading to a 2.14\% price decline when corporations announce layoffs or release deceptive information. Additionally, we observe that information becomes more influential in predicting price movements for companies with lower financial valuation. We interpret this finding as suggesting that higher-valued companies may exhibit greater managerial resilience to changes, thereby reducing market perceptions of risk associated with critical information.}