We analyze nonlinear adjustments of capital and labor using plant data from the Colombian Annual Manufacturing Survey, allowing for interdependence in adjustments of the two factors. We find nonlinear employment and capital adjustments. We also find that capital shortages reduce hiring, and...

Recent theoretical models conjecture that the development of the financial sector is essential for economic growth. We investigate this hypothesis from a time-series perspective and find that financial sector GDP is cointegrated for many OECD countries not so much with manufacturing GDP but...

We study the consequences of an exogenous upsurge in coca prices and cultivation in Colombia, where most coca leaf is now harvested. This shift generated only modest economic gains in rural areas, primarily in the form of increased self-employment earnings and increased labor supply by teenage...