This paper investigates how the size of co-ethnic networks at the time of arrival affect the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes....

This paper exploits several reforms of wage subsidies in the framework of the German Minijob program to investigate substitution and complementarity relationships between subsidized and non-subsidized labor demand. We apply an instrumental variables approach and use administrative data on German...

Sticky price models featuring heterogeneous firms and systematic firm-level productivity trends deliver radically different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (1) the optimal steady-state inflation rate generically differs from zero and...

This note examines the potential output gains from the implementation of optimal teacher incentive pay schemes, by calibrating the Hölmstrom and Milgrom (1987) hidden action model using data from Muralidharan and Sundararaman (2011), a teacher incentive pay experiment implemented in Andhra...

Macroeconomic news announcements are elaborate and multi-dimensional. We consider a framework in which jumps in asset prices around macroeconomic news and monetary policy announcements reflect both the response to observed surprises in headline numbers and latent factors, reflecting other...

Estimates of the trade elasticity based on actual trade policy changes are scarce, and the few that exist are all over the place. This paper offers a setting where an exogenous increase in a border tax can be used to estimate the trade elasticity. It shows theoretically and empirically that if...

We derive exact conditions relating the distributions of firm productivity, sales, output, and markups to the form of demand in monopolistic competition. Applications include a new “CREMR” demand function (Constant Revenue Elasticity of Marginal Revenue): it is necessary and sufficient for...

This article provides a possible explanation for the heterogeneity of tax reaction functions under tax competition. In particular, we assume the existence of three jurisdictions, i, j and z, as well as of spillovers. Given this simple framework, we show that if jurisdictions compete to attract...

We study corporate income tax competition when firms operating in multiple jurisdictions can shift income using financial planning strategies. Several such strategies, particularly intra-corporate lending, appear to be actively pursued by companies to reduce subnational corporate taxes in...

This paper examines the pattern of foreign direct investment (FDI) in producer services. We develop a model of FDI in these services and test its predictions using panel data on U.S.FDI in 25 host countries from 1976 to 1995. We find evidence that, in addition to governmental and cultural...