The attachment of adult women to the Italian labour market in the shadow of COVID-19.

We investigate the attachment to the labour market of women in their 30s, who are combining career and family choices, through their reactions to an exogenous, and potentially symmetric shock, such as the COVID-19 pandemic. We find that in Italy a large number of women with small children, living in the North, left permanent (and temporary) employment and became inactive in 2020. Despite the short period of observation after the burst of the pandemic, the identified impacts appear large and persistent, particularly with respect to the men of the same age. We argue that this evidence is ascribable to specific regional socio-cultural factors, which foreshadow a potential long-term detrimental impact on female labour force participation.

Mobility decisions, economic dynamics and epidemic.

We propose a model, which nests a susceptible-infected-recovered-deceased (SIRD) epidemic model into a dynamic macroeconomic equilibrium framework with agents' mobility. The latter affect both their income and their probability of infecting and being infected. Strategic complementarities among individual mobility choices drive the evolution of aggregate economic activity, while infection externalities caused by individual mobility affect disease diffusion. The continuum of rational forward-looking agents coordinates on the Nash equilibrium of a discrete time, finite-state, infinite-horizon Mean Field Game. We prove the existence of an equilibrium and provide a recursive construction method for the search of an equilibrium(a), which also guides our numerical investigations. We calibrate the model by using Italian experience on COVID-19 epidemic and we discuss policy implications.

The interrupted power law and the size of shadow banking.

Using public data (Forbes Global 2000) we show that the asset sizes for the largest global firms follow a Pareto distribution in an intermediate range, that is "interrupted" by a sharp cut-off in its upper tail, where it is totally dominated by financial firms. This flattening of the distribution contrasts with a large body of empirical literature which finds a Pareto distribution for firm sizes both across countries and over time. Pareto distributions are generally traced back to a mechanism of proportional random growth, based on a regime of constant returns to scale. This makes our findings of an "interrupted" Pareto distribution all the more puzzling, because we provide evidence that financial firms in our sample should operate in such a regime. We claim that the missing mass from the upper tail of the asset size distribution is a consequence of shadow banking activity and that it provides an (upper) estimate of the size of the shadow banking system. This estimate-which we propose as a shadow banking index-compares well with estimates of the Financial Stability Board until 2009, but it shows a sharper rise in shadow banking activity after 2010. Finally, we propose a proportional random growth model that reproduces the observed distribution, thereby providing a quantitative estimate of the intensity of shadow banking activity.