In developing countries, income per capita typically remains stagnant for long periods before taking-off. We study this as the outcome of a gradual transition of the workforce from traditional to modern sectors. While exogenous productivity growth is present in the modern sector only, transition...

In developing countries, the gradual transition to modern growth seems puzzling given the large productivity growth gap between traditional and modern sectors. We document this transition and develop a theory that resolves this puzzle. The key forces are sector-specific complementarity between...

The empirical literature examining aggregate data has generally found small or insignificant effects of exchange rate fluctuations on export volumes. This lack of association between real quantities, such as export volumes and the exchange rate is the so-called "exchange rate disconnect puzzle."...

Among today's rich economies, per capita output levels had diverged before converging to the levels of the frontier economy. Many non-rich countries also appear to follow this pattern of growth. Since frontier economies have grown at stable rates, non-frontier economies display an S-shape...

We propose and estimate a model in which changes in the demographic composition of the labor force may aamp;#64256;ect the returns to labor market experience. We consider workers as providing two distinct productive services - physical eamp;#64256;ort, or quot;labor,quot; and services of the skill...

I consider a model where a principal decides whether to produce one unit of an indivisible good (e.g. a private school) and which characteristics it will contain (emphasis on language or science). Agents (parents) are differentiated along two substitutable dimensions: a vertical parameter that...