We review the literature on sovereign debt. We organize our survey around three central questions: (1) Why do sovereign debtors ever repay their debts? (2) What burdens, in the form of distortions and inefficiencies, does sovereign debt impose? and (3) How might debt be restructured to reduce...

Married women's labor force participation has increased dramatically over the last century. Why this has occurred has been the subject of much debate. This paper investigates the role of culture as learning in this change. To do so, it develops a dynamic model of culture in which individuals...

This paper discusses some recent advances in the area of culture and economics and examines the effect of culture on a key economic outcome: female labor supply. To separate the effect of market variables and institutions from culture, I use an epidemiological approach, studying...

This paper presents a model of the intergenerational transmission of education and marital sorting where parents matter both because of their household income and because parental human capital determines the expected value of a child's disutility from making an effort to become skilled. We show...

This paper examines the education literature through the lens of sorting. It argues that how individuals sort across neighborhoods, schools and households (spouses), can have important consequences for the acquisition of human capital and inequality. It discusses the implications of different...

This paper examines the properties of exams and markets as alternative allocation devices under borrowing constraints. Exams dominate markets in terms of matching efficiency. Whether aggregate consumption is greater under exams than under markets depends on the power of the exam technology; for...

The last decade has witnessed an explosion in the number of regional trade agreements (RTAs). There seems to be a general if ill-defined belief on the part of many policy-makers, and among a number of academics as well, that there is more to a RTA than the traditional gains from trade. This...

This paper examines the optimal labor contract in a small open economy with incomplete markets under international price uncertainty. The effect on employment, wages, and profits of different realizations of the state of nature is studied and agents' preferences concerning the implementation of...

Many social commentators have raised concerns over the possibility that increased sorting in a society can lead to greater inequality. To investigate this we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to...

Over the last few decades many US states have made large changes to their systems of financing K-12 education with the explicit objective of providing more equitable educational opportunities. There has been relatively little accompanying analysis, however, examining how these changes might...