IBS Speaker Series: Hiding Filthy Lucre in Plain Sight: Theory and Identification of Business-Based Money Laundering

Zoom link: https://cuboulder.zoom.us/j/98382278178 – email ibs-contact@colorado.edu for password.

Alessandro Peri

Presentation Video

Abstract: Profits from illicit activities percolate into the official sector via a variety of channels. We exploit international regulations targeting money laundering via the financial sector to identify the flows of “dirty money” into legitimate establishments: business-based money laundering. We formalize the general equilibrium implications of anti-money laundering (AML) regulations in a model where a drug cartel launders money via a financial channel or by paying the fixed cost of initiating a legitimate business. We use a research-design approach that links US county activity to AML-regulations in offshore jurisdictions to provide first empirical evidence of the phenomenon (Joint paper with Keith E. Maskus and Anna Rubinchik).

Bio: Alessandro Peri's research focuses on two main areas. One on side, it investigates the effect of changes in the law on the macroeconomy. His main area of expertise is the phenomenon of corporate default with a particular focus on the macroeconomic consequence of changes in the corporate bankruptcy law. Most recently, he has been studying the general equilibrium implications of changes in anti-money laundering policy. On the other side, it focuses on computational economics. He is the first to propose a hardware approach to solve economic models using FPGA technology. The ultimate goal is to create a new field of computational economics at the intersection between economics and engineering by introducing the use of application-specific chips for accelerating the solution of economists’ algorithm.