We present a model of growth and distributional conflict that implies a non-monotonic relationship between average wealth and the likelihood of radical redistribution; while the net benefits of redistribution for members of the poor class are small at low stages of development, a shift towards...

We develop and analyze a labor search model in which heterogeneous firms operate under decreasing returns and compete for labor by publicly posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages that attract more workers which allows to fill vacancies with...

In U.S. data 1981-2012, unsecured firm credit moves procyclically and tends to lead GDP, while secured firm credit is at best acyclical. In this paper we develop a tractable dynamic general equilibrium model in which unsecured firm credit arises from self-enforcing borrowing constraints...

If sector productivities follow a symmetric two-state Markov process, many of our economies converge to a periodic cycle alternating between mild expansions and abrupt contractions.

We propose a model of directed search with multi-worker firms, and show its properties for the growth dynamics of firms and the market efficiency.

This paper analyzes the effects of adverse selection on worker turnover, wage dispersion, and resource allocation in labor markets. We consider a model of on-the-job search where firms offer long-term wage contracts to workers of different ability. Firms do not observe worker ability upon hiring...

The paper analyzes how the removal of barriers to entry in banking affect loan competition, bank stability and economic welfare. We consider a model of spatial loan competition where a market that is served by less efficient banks is opened to entry by banks that are more efficient in screening...

We consider a linear growth model with idiosyncratic productivity shocks in whichproducers cannot commit to repay their loans. Borrowing constraints are determinedendogenously by the borrowers’ incentives to repay, assuming that defaulters lose a shareof output and are excluded from future...