We argue that labor mobility does not lead to a ''race to the bottom,'' where countries drastically cut redistributive transfers in order to attract skilled workers. The basis of our argument is that these cuts are not credible policies. We propose a two country model where competition for...

We ask whether worker mobility has undermined the ability of U.S. states to redistribute income. We build a tractable model where both migration decisions and redistribution policies are jointly determined. Our model features a large number of heterogeneous regions and skilled and unskilled...

We analyze the joint determination of income redistribution and migration flows across fiscally independent regions. In our model, regional governments lack commitment so their policy announcements must be credible, and redistribution between skilled and unskilled workers is bounded by...

I show that multiple equilibria are a general property of economies under full monetary policy discretion. Three simple conditions are sufficient to rule out, generically, a unique equilibrium in a static economy. The key departure from Barro and Gordon (1983) is to consider bounded welfare...

A number of stylized facts have been documented about the extensive margin of trade---which firms export, and how many products they send to how many destinations. We argue that the sparse nature of trade data is crucial to understanding these stylized facts. Typically the number of...

The U.S. non-financial corporate sector became a net lender vis-a-vis the rest of the economy in the early 2000s. We document this fact in the aggregate and firm-level data. We then develop a structural dynamic model with investment to study the firms' financing decisions. Debt is fiscally...

reallocation are halved.

We consider a simple state verification technology in a dynamic private information economy. We find that the marginal benefit may be below the marginal cost of investment under the constrained efficient allocation. In particular, if the planner can verify a the type of a sufficiently large...

Social and private insurance schemes rely on legal action to deter fraud and tax evasion. This observation guides us to introduce a random state-verification technology in a dynamic economy with private information. With some probability, an agent's skill level becomes known to the planner who...