We propose a mechanism for labor-market polarization based on the nonhomotheticity of demand that we call the income-driven channel. Our mechanism builds on a novel empirical fact: expenditure elasticities and production intensities in low- and high-skill occupations are positively correlated...

We use a panel of historical patent data covering a large range of countries over the past century to study the evolution of innovation across time and space and its effect on productivity. We document a substantial rise of international knowledge spillovers as measured by patent citations since...

This paper empirically examines the effects of financial crises on the organization of production of multinational enterprises. We construct a panel of European multinational networks from 2003 through 2015. We use as a financial shock the increase in risk premia between August 2007 and July...

Standard dynamic models of structural transformation, without knife-edge and counterfactual parameter values, preclude balanced growth path (BGP) analysis. This paper develops a dynamic equilibrium concept for a more general class of models - an alternative to a BGP, which we coin a Stable...

This paper develops and implements a novel test of the Stolper-Samuelson theorem. We use nationally-representative matched employer-employee panel data from 1997 through 2015 to study the effect of the rise in China's exports on French worker earnings. Our version of the Stolper-Samuelson...

How does international trade affect technology diffusion? We show that tariff increases in Brazil lead to more international technology transfers to Brazilian firms and more citations to foreign patents. The highest increase in citations occurs among firms located near those receiving technology...

Variation in technology adoption is a key driver of differences in productivity. Previous studies sought to explain variations in technology adoption by heterogeneity in profitability, costs of adoption, or other factors. Less is known about how adoption is affected by bias in the perceived...

The theory of incomplete contracting is rival to that of complete contracting as a frame of reference to understand contractual relationships. Both approaches rest upon diametrically opposed postulates and lead to very different policy conclusions. From a theoretical viewpoint, scrutiny of the...

Among available policy levers to boost innovation, investment in applied research organisations has received little empirical attention. In this paper, we analyse the case of the Fraunhofer Society, the largest public applied research organization in Germany. We analyse whether project...

Several European countries such as Spain, Portugal, and Greece implemented austerity programs to cope with the government-debt crisis in the aftermath of the Great Recession: They increased taxes on consumption, labour, and capital and reduced government expenditures to prevent a large increase...