How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

This paper shows that large, multi-establishment business enterprises face a high cost of middle management in poor countries and that this cost inhibits the growth of the modern sector. We provide new empirical evidence using a database covering compensation for 300,000 middle managers working...

We document a process of rapid tertiarization of the Chinese economy since 2005. The employment and value-added shares of the service sector have increased significantly. Moreover, total factor productivity growth has increased faster in the service sector than in the manufacturing sector....

We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation that borrowers and savers differ in their marginal...

We design a new experimental framework to study policy interventions to combat secular stagnations and liquidity traps in an overlapping-generations environment where participants form expectations and make real economic decisions. We observe that participants can learn to coordinate on high...

Previous research finds correlation between sentiment and future economic growth, but disagrees on the channel that explains this result. In this paper, we shed new light on this issue by exploiting cross-country variation in sentiment and market efficiency. We find that sentiment shocks in G7...

This paper reviews recent literature on China's macroeconomic development, emphasizing the critical role of the gradualist approach over the past four decades. Beyond China's structural transformation, we explore various aspects such as high saving rates, the housing boom, an expanding current...

We build a two-country general equilibrium model to analyze the effects of cross-border data flows and pre-existing development gaps in data economies on each country's production and international trade. Raw data as byproducts of consumption can be transformed into various types of working data...

Global innovation and entrepreneurship has traditionally been dominated by a handful of high-income countries, especially the US. This paper investigates the international consequences of the rise of a new hub for innovation, focusing on the dramatic growth of high-potential entrepreneurship and...

Are developing-world cities engines of opportunities for low-wage earners? In this study, we track a cohort of young low-income workers in Brazil for thirteen years to explore the contribution of factors such as industrial structure and skill segregation on upward income mobility. We find that...