This paper proposes that strong financial, judicial, and labor market institutions provide comparative advantage in clean industries, and thereby improve a country's environmental quality. Five complementary tests support this hypothesis. First, industries that depend on institutions are...

We study local carbon policy to address the consequences of climate change. Standard analysis suggests that the social cost of carbon determines optimal carbon policy. We start by using the spatial integrated assessment model in Cruz and Rossi-Hansberg (2021) to measure the local social monetary...

The effects of immigration are reasonably well understood in developed countries, but they are far more poorly understood in developing ones despite the importance of these countries as immigrant destinations. We address this shortcoming by studying the effects of immigration to Brazil during...

Microcredit promised business growth for small firms lacking access to banking loans. Yet while reaching millions, recent randomized evaluations suggest limited average business impacts. Critics often blame contract rigidity, specifically the fixed and frequent installments, for the lack of...

This paper estimates that the macroeconomic damages from climate change are six times larger than previously thought. We exploit natural variability in global temperature and rely on time-series variation. A 1°C increase in global temperature leads to a 12% decline in world GDP. Global...

A unilateral carbon tax trades off the distortionary costs of taxation and the future gains from slowing down global warming. Because the cost is local and immediate, whereas the benefit is global and delayed, this tradeoff tends to be unfavorable to unilateral carbon taxes. We show that this...

How much of the economy is focused on protecting, rehabilitating, or managing the environment? To answer this question, we develop a proof-of-concept environmental activity account to quantify the environmental goods and services sector (EGSS) in the United States. Methodologically, we employ a...

This paper studies competing sources of declining dynamism. Evidence shows that an important component of this decline is accounted for by the reduction in the response of employment to shocks in US establishments. Using a plant level dynamic optimization problem as a framework for analysis,...

We develop a novel method for assessing the effect of constraints imposed by spatially-fixed natural resources on aggregate economic output. We apply it to estimate and compare the projected effects of climate change and population growth over the course of the 21st century, by country and...

We investigate the short- and long-term effects of a natural gas boom in an economy where energy can be produced with coal, natural gas, or clean sources and the direction of technology is endogenous. In the short run, a natural gas boom reduces carbon emissions by inducing substitution away...