We estimate the "incapacitation effect" on crime using variation in Italian prison population driven by eight collective pardons passed between 1962 and 1990. The prison releases are sudden (within one day), very large (up to 35 percent of the entire prison population), and happen nationwide....

We estimate the “incapacitation effect” on crime using variation in Italian prison population driven by eight collective pardons passed between 1962 and 1990. The prison releases are sudden, within one day, very large, up to 35 percent of the entire prison population and happen nationwide....

Stock-market crashes tend to follow run-ups in prices. These episodes look like bubbles that gradually inflate and then suddenly burst. We show that such bubbles can form in a Zeira-Rob type of model in which demand size is uncertain. Two conditions are sufficient for this to happen: A declining...

A model with new industries opening as a Poisson arrival is set up. Firms have the choice to "hop" into new industries searching for their abilities there. The model aims at linking endogenous skill prices (and the value of the firm), the product life cycle and the timing of the switch to the...

This paper proposes a strategy to measure, in a unified setting, how the job finding probability and the job separation probability conditional on observable and unobservable individual characteristics varies over the business cycle. Recent papers by Shimer and Hall point out how new...

This article provides a microfoundation for the rise in optimism that seems to precede market crashes. Small, young markets are more likely to experience stock-price run-ups and crashes. We use a Zeira-Rob type of model in which demand size is uncertain. Optimism then grows rationally if...

Stock-market crashes tend to follow run-ups in prices. These episodes look like bubbles that gradually inflate and then suddenly burst. We show that such bubbles can form in a Zeira-Rob type of model in which demand size is uncertain. Two conditions are sufficient for this to happen: A declining...

Beneficiaries of Social Security face restrictions on how much they can earn without incurring the earnings test (ET). In 2000, President Clinton eliminated the ET between ages 65 and 70. In this paper, I evaluate how this removal impacts the long-term finances of the Trust Fund. I find that...