by conditional first moments.

We study the cross-country relationship between the relative price of tradables and income per capita. The theory developed is based on financial frictions and differences in the efficient scale of production across sectors. Countries with more severe financial frictions are more dependent on...

The gender differentials in schooling and labor market outcomes have narrowed significantly in the last few decades. At the same time, it is well documented that idiosyncratic income risk has risen over the same period. We define idiosyncratic risk as the variance of the unobserved wage...

particular, financial intermediaries can invest resources to monitor the returns earned by firms. The inability to monitor perfectly leads to firms earning rents. Undeserving firms are financed, while deserving ones are under funded. A more efficient monitoring technology squeezes the rents...

the contribution of housing booms and busts to business cycles.

The paper examines the link between trade openness and the benefits of exchange rate flexibility under real foreign shocks and nominal rigidities. The benefits of exchange rate flexibility are defined as the welfare difference between outcomes under fixed exchange rates and under an optimized...

overall gains from openness.

Plenary session.