We study the integration process of the North and South Korean economies. Our model incorporates elements that are necessary for explaining closely-related transition experiences (i.e., the growth miracles of East Asia and the post-communist transitions of Eastern Europe). We calibrate the model...

In our model, short-sighted policy-makers choose to subsidize productive entrepreneurs to relax their limited commitments. In the short-run, this policy reallocates capital from unproductive towards productive entrepreneurs, and boosts per-capita income, TFP and capital accumulation. Over time,...

We build a model of retirement and assess what are the main forces that drove the macroeconomic pattern in retirement in the US economy during the 20th century. We in particular consider the role of technological progress, demographic change and the Social Security system.

market frictions over time with self-financing. With intermediate levels of frictions in the capital market, welfare costs of market incompleteness have a U shape against the persistence of idiosyncratic shocks. The right arm of the U reflects the difficulty of self-insurance against very...

2. Allowing entrepreneurs to move across borders. We find that entrepreneurs who are highly-talented but financially constrained in the financially less developed country migrate to the more developed country to take advantage of better financial markets. We interpret this outcome as brain...

We study the cross-country relationship between the relative price of tradables and income per capita. The theory developed is based on financial frictions and differences in the efficient scale of production across sectors. Countries with more severe financial frictions are more dependent on...

We develop a model of retirement and human capital investment to study the effects of tax and retirement policies. Workers choose the supply of raw labor (career length) and also the human capital embodied in their labor. Our model explains a significant fraction of the US-Europe difference in...

We develop a model that accounts for several stylized facts about immigrant earnings. First, it implies that new immigrants learn less than natives with the same level of schooling. Second, depending on the age of immigration, it implies that initially, immigrant earnings need not grow faster...

We study human capital investment decisions in the face of risk. Human capital is an important source of uninsurable idiosyncratic risk. However, the few studies that focus on the effect of risk on human capital investment typically treat human capital like any other risky asset, without taking...