We study an economy where agents are heterogeneous in terms of observablewealth and unobservable talent. Adverse selection forces creditors to ask forcollateral. We study the two-way interaction between rationing in the creditmarket and the wages offered in the labor market. Both pooling and...

In this paper we review as well as contribute to the empirical literature on the impact of landreform on agricultural productivity in India. We find that, overall for all states, land-reform legislation had anegative and significant effect on agricultural productivity. However, this hides...

We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurialtalent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurshipbecause of adverse selection. The severity of this problem depends on the outside...

The well-known inverse relationship between farm size and productivity is usually explained in terms ofdiminishing returns with respect to land and other inputs coupled with various types of market frictions thatprevent the efficient allocation of land across farms. We show that even in the...

We analyze a simple and tractable model of occupational choice in the presence of credit marketimperfections. We examine the effect of parameters governing technology and transaction costs, andhistory, in terms of the initial wealth distribution, in determining the long-term wealth...

The experience of West Bengal under the panchayat system stands in sharp contrast withthat of other states and, together with land reform, it has been credited for playing animportant role in the impressive economic turnaround of the state since the mid 1980s. WestBengal is the first and the...