What accounts for the unprecedented decline in world trade during the crisis? What have been the consequences of shifting risk appetites for international capital flows? How have they differed across developed and developing economies? We answer these questions in an international real business...

Emerging countries tend to default when their economic conditions worsen. If bad times in an emerging country correspond to bad times for the US investor, then these foreign sovereign bonds are particularly risky and should offer high returns. We explore how this mechanism plays out in the data...

banks.

and that the derivative at the balanced growth equilibrium can be computed analytically from the primitives of the model.

We build a business cycle model where employers' screening of heterogeneous workers plays a central role in determining both the flows into and out of unemployment. The model can address how differences between the US and European labor market flows affect business cycle dynamics. It provides a...

This paper presents and estimates a sticky-price model with heterogeneous households and financial frictions. Frictions in state-contingent asset markets lead to imperfect risk-sharing among households with idiosyncratic labor incomes. I study the impacts of the introduced …financial frictions...

We develop a dynamic politico-economic model of public investment where decisions can be made at several levels of government: federal, state, or county. The model predicts that in the absence of internal mobility, the higher level of government would fund all investments that present positive...

We explore how developmental and regulatory impediments to resource reallocation limit the ability of developing countries to adopt technologies: an efficient economy quickly innovates; but when the economy is unable to fully use resources liberated by closing firms, or when policy distortions...

points.

the incentive to adjust the workforce. I relax this assumption and introduce wage bargaining with multiple workers. A reduced-form empirical decomposition suggests that transitory shocks to sales have a strong effect on wages, but that permanent shocks have a very small effect on wages. I...