This paper applies the insights of the literature on idiosyncratic shocks to inividual labor productivity to the dynamics of plant-level total factor productivity. Recent work in I.O. has emphasized the importance of firm- and plant-level heterogeneity in total factor productivity. Most of the...

The present project introduces the possibility of default on the trading contracts in an infinite horizon incomplete markets model, relaxing the usual assumption made in the literature with respect to the trading limits, which are chosen to be fixed or independent of the characteristics of the...