In sum, we find that an unanticipated tightening in borrowing conditions on its own can generate a large recession that is far more persistent than the financial shock itself. Because it causes long-lived disruption in the distribution of capital, and thus production, an episode of tight credit...

An important insight of our analysis is that changes in the persistence and variability of idiosyncratic order costs and productivities alter the distribution of firms over inventory levels. This, in turn, affects the extent and speed of firms' responses to aggregate shocks, and thus the model's...

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...

Many studies using business-level microdata have documented large size average differences across plant ages. New businesses tend to be much smaller than their established industry competitors. This size gap also closes slowly, taking well over a decade on average. We show that even for...