The existing literature on financial development focuses mostly on the causal impact of the quantity of financial intermediation on economic development. This paper, instead, focuses on the role of the financial sector in creating securities that cater to the needs of heterogeneous investors. To...

We present a model in which the importance of financial intermediation for development can be measured. We generate differences in the quantity of financial intermediation by varying the degree to which loan contracts can be enforced. Economies where contracts are poorly enforced employ less...

We show that the inability of a standardly-calibrated labor search-and-matching model to account for labor market volatility extends beyond the U.S. to a set of OECD countries. That is, the volatility puzzle is ubiquitous. We argue cross-country data is helpful in scrutinizing between potential...