We study the determinants of capital income inequality in a general equilibrium portfolio choice model with endogenous information acquisition. The key elements of the model are heterogeneity in investor sophistication and in asset riskiness. The model implies capital income inequality that...

What contributes to the growing income inequality across U.S. households? We develop an information- based general equilibrium model that links capital income derived from financial assets to a level of investor sophistication. Our model implies income inequality between sophisticated and...

This paper develops a test for changes in the distribution of good-level prices over time and applies it to grocery store data. The method is based on the Kolmogorov-Smirnov statistic, which measures the distance between two empirical distributions. This test is robust to different data...

We develop an information-based model of discrete adjustment in the labor market, in which the firm adjusts to shocks by varying the number of employed workers. Decisions about the firm's employment level are made on the basis of imprecise awareness of current market conditions. Imperfect...

In this paper, we argue that government confusion about the nature of the shock to the economy when observing banks in distress has the potential to relax the time inconsistency of policymakers and the ensuing collective moral hazard that leads to endogenous systemic events. Government confusion...

This paper presents a model of sovereign default with multi-period debt contracts with endogenous maturity. The sovereign in the model chooses the most favorable combination of interest rate, loan size and maturity out of the contracts oered in equilibrium by international lenders. All three...

Using a comprehensive panel dataset on U.S. households, we study the effects of the 2005 bankruptcy reform on bankruptcy, delinquency and debt accumulation. We find that the reform coincided with a 23% permanent drop in the bankruptcy rate relative to pre-reform level. We further document that...

output and TFP, respectively.

A contentious debate in finance revolves around whether investment managers add any value for their clients. Presumably, households delegate the investment decision because these managers are able to process information and use it efficiently to generate additional return. The raises the...

Using a comprehensive panel data set on U.S. households, we study the effects of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the most substantive reform of personal bankruptcy in the United States since the Bankruptcy Reform Act of 1978. The 2005 legislation...