We show that direct investments by consumers without the use of financial intermediaries can efficiently allocate financial capital to firms seeking funding for production of a novel consumption good. In our setting, consumers are also investors, and their privately known consumption preferences...

In this essay we analyze the relation between long-term growth and institutional development. Relative backwardness has been a constant feature of the history of Latin America. In the wake of Independence the gap between Latin America and the industrializing world was already wide and widened...

We model networks of relational (or implicit) contracts, exploring how sanctioning power and equilibrium conditions change under different network configurations and information transmission technologies. In our model relations are the links, and the value of the network lies in its ability to...