We present an analytically tractable general equilibrium business cycle model that features micro-level investment lumpiness. We prove an exact irrelevance proposition which provides sufficient conditions on preferences, technology, and the fixed cost distribution such that any positive upper...

This paper introduces sectorial heterogeneity in TFPs in a growth model to generate new insights on trade, sectorial reallocation, and economic growth. The rate of overall economic growth in this model is a simple average of sectorial growth in a closed economy, but will depend on trade...

This paper presents a new argument for international monetary policy coordination based on considerations of structural asymmetries across countries. In a two-country world with a traded and a non-traded sector in each country, optimal independent monetary policy cannot replicate the...

Private credit plays a critical role in the real economy. The provision of credit to businesses reduces the need for internal finance and promotes investment, for households it reduces consumption volatility. While both businesses and households rely on bank credit, prior literature emphasizes...

A growing share of water pollution in the U.S. can be attributed to nonpoint sources (USEPA 2002). Some of this trend can be attributed to declining point source (PS) emissions as a result of regulation under the Clean Water Act (CWA). However, fertilizer-intensive practices used to improve...