This paper builds a theory of the shape of the distribution of total-factor productiv- ity (TFP) across countries. The data on productivity suggests vast differences across countries, and arguably even has "twin peaks". The theory proposed here is consistent with vast differences in long-run...

We model a labor market with search and matching frictions where some or all workers belong to a (centralized) union, both in the case where coverage is exogenously given and where it is endogenous. Unions are assumed to choose identical wages for all unionized workers, and firms are assumed not...

This paper analyzes a business cycle model with labor market frictions as well as an extensive labor supply margin. There are exogenous aggregate shocks to productivity, the job finding rate, and the separation rate. Workers also face idiosyncratic productivity (wage) shocks that they cannot...

Recent research has been able to measure two forms of technical change---one (fossil) energy-saving and one saving on capital/labor. The results first show strong evidence for "directed technical change" in the sense that the total resources devoted to saving on the inputs responds endogenously...

Marriage has declined since 1960. The drop has been bigger for unskilled individuals versus skilled ones. Simultaneously, divorce has increased. More so for the non-college educated vis à vis the college educated. Additionally, assortative mating has risen. People are more likely to marry...

How important is financial development for economic development? A costly state verification model of financial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the firm-size distribution for...

Union membership displayed a ∩-shaped pattern over the 20th century, while the distribution of income sketched a ∪. A model of unions is developed to analyze this phenomena. There is a distribution of firms in economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a...