It is generally impossible to design an ex post efficient mechanism for bilateral trading when the traders' valuations for an object of trade are private, there are no outside subsidies and the traders can refuse to carry out a transaction if they expect to lose money. The first two essays focus...

We develop a general equilibrium multi-industry model in which firms use external funds to conduct productivity-enhancing R&D. Industries differ in terms of research costs, which lead them to different optimal research expenditures. In the model, more R&D-intensive industries require more...

In a multi-industry growth model, firms need external funds for productivity-enhancing R&D, and face financing constraints. The cost of research differs across industries, so financing constraints hinder industry productivity growth unevenly. Equilibrium industry dynamics map into a...

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Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience...

What kinds of credit substitution, if any, occur when changes to banks’ minimum capital requirements induce banks to change their supply of credit? The question is central to the new ‘macroprudential’ policy regimes that have been constructed in the wake of the global financial crisis,...