In modern democracies, public policies are negotiated among elected policymakers. Yet, most macroeconomic models abstract from post-election negotiation. In order to understand the determinants of redistribution, this paper studies legislative bargaining in a growth model where individuals are...

The international trade literature finds strong links between firm growth and export decisions. In spite of this, the literature analyzing cross-country differences in firm growth commonly abstracts from trade. We develop a tractable, dynamic model to understand the consequences of this...

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...

We explore the relationship between changes in labor income inequality and movements in labor taxes over the last decades in the US. In order to do so, we model this relation through a political economy channel by developing a median voter result over sequences of capital and labor taxes. We...

This paper studies politicians who have a present-bias for spending; they want to increase current spending and procrastinate spending cuts. We argue that legislators' bias is more severe in economies with low institutional quality. We show that disagreement in legislatures leads to policy...

Entering a currency union without any political union European countries have taken a gamble: will the needs of the currency union force a political integration (as anticipated by Monnet) or will the tensions create a backlash, as suggested by Kaldor, Friedman and many others? We try to answer...

We present a model where firms compete for scarce managerial talent ("alpha") and managers are risk-averse. When managers cannot move across firms after being hired, employers learn about their talent, allocate them efficiently to projects and provide insurance to low-quality managers. When...

We use quasi-random variation in the fraction of time served in the Italian “open-cell prison” of Bollate to estimate the effect of rehabilitation efforts on recidivism. We deal with the endogeneity of rehabilitation assignments by focussing on those sources of variability in the length of...

It has long been recognized that variations in expected future cash flows are not enough to account for variations in asset prices. Variation in willingness to bear risk is also needed. Asset pricing theories have accordingly focused on models characterized by preferences that allow for time...

While both cultural and legal norms (institutions) help foster cooperation, culture is the more primitive of the two and itself sustains formal institutions. Cultural changes are rarer and slower than changes in legal institutions, which makes it difficult to identify the role played by culture....