In this paper, we study how macroeconomic volatility affects social welfare through its impact on political institutions. In the presence of asymmetric information on the quality of politicians, volatility shapes political outcomes in two ways: (1) it alters the incentives of incumbents by...

of exporting behavior. In addition - and differently from a standard sunk cost model - the model predicts more persistence of exporting behavior in markets with better legal institutions and for more productive exporters. We test these and other predictions on French firm level export data...

Hence, our analysis sheds new light on trade policy in a model of intra-industry trade.

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries....