We propose a theory linking imperfect information to resource misallocation and hence to aggregate productivity and output. In our setup, firms look to a variety of noisy information sources when making input decisions. We devise a novel empirical strategy that uses a combination of firm-level...

This paper analyzes the impact of fiscal federalism on income inequality and redistribution. Theoretically contradicting arguments ask for empirical evidence to obtain a better knowledge of this relationship. We rely on the institutional setting in Switzerland to study the issue empirically....

We examine the determinants of corporate liquidity management through the lens of an estimated dynamic model of corporate investment and financing. When external finance is costly, firms can absorb shocks and cover liquidity needs by holding cash and by drawing down credit lines. In contrast to...