This paper asks whether Germany was ever an economically integrated area. I explore the geography of trade costs in a new data set of about 40,000 observations on regional trade flows within and across the borders of Germany over the period 1885 – 1933. There are three key results. First, the...

A large literature documents the impact of borders on trade. However, in all these studies border effects are identified from cross-sectional variation alone. We do not know the "treatment effect" of borders nor can we rule out reverse causation. Here, we exploit the border changes imposed...

This Paper uses annual data spanning 1870 to 1930 on a set of variables correlated with business conditions to construct an index of real economic activity in Switzerland. We extract an estimate of the common component of the data series using principal components analysis and the unobservable...

Between 1850 and 2000, Spain’s real income increased by about 40-fold, at an average rate of 2.5 percent. The sources of this long-run growth are investigated using Jorgenson-type growth accounting analysis. We find that growth upsurges are closely related to increases in TFP. Spanish economic...

The paper considers ways of avoiding a liquidity trap and ways of getting out of one. Unless lower short nominal interest rates are associated with significantly lower interest volatility, a lower average rate of inflation, which will be associated with lower expected nominal interest rates,...

This paper examines the role of competition in productivity perfromance in Britain over the period from the late-nineteenth to the early twenty-first century. A detailed review of the evidence suggests that the weakness of competition from the 1930s to the 1970s undermined productivity growth...

This article introduces a method to quantify the effect of a firm’s strategic choices on the risk profile of its profits at different horizons. We combine a demand system for differentiated products with counterfactual paths of risk factors. Prices, costs and quantities respond endogenously to...

The lemons model assumes that owners of used cars have an informational advantage over potential buyers with respect to the quality of their vehicles. Owners of bad cars will try to sell them to unsuspecting buyers while owners of good cars will hold on to theirs. Consequently, the quality of...

The dynamic behavior of the term structure of interest rates is difficult to replicate with models, and even models with a proven track record of empirical performance have underperformed since the early 2000s. On the other hand, survey expectations are accurate predictors of yields, but only...

We present a tractable, linear model for the simultaneous pricing of stock and bond returns that incorporates stochastic risk aversion. In this model, analytic solutions for endogenous stock and bond prices and returns are readily calculated. After estimating the parameters of the model by GMM,...