This paper measures mismatch between job-seekers and vacancies in the U.S. labor market. Mismatch is defined as the distance between the observed allocation of unemployed workers across sectors and the optimal allocation that solves a planner’s problem. The planner’s allocation...

We compare the inflation expectations reported by consumers in a survey with their behavior in a financially incentivized investment experiment designed such that future inflation affects payoffs. The inflation expectations survey is found to be informative in the sense that the beliefs reported...

The limited nature of data on employment referrals in large business and household surveys has so far restricted our understanding of the relationships among employment referrals, match quality, wage trajectories and turnover. Using a new firm-level dataset that includes explicit information on...

Behavioral economics presents a "paternalistic" rationale for government intervention. Current literature focuses on benevolent government. This paper introduces politicians who may indulge/exploit these behavioral biases. We present an analysis of the novel features that arise when the...

The positive link between international trade and productivity is well established. However, research on magnitude and consequences of internal trade barriers, which inhibit the efficient geographic distribution of production within a country, is limited. Unique data from Canada and China...

Can a union of sovereign nations efficiently implement fiscal projects, even when members are purely self-interested? We construct a model where forming a union can be beneficial for all members, even though some nations are net contributors to the union budget. In our model, joining the union...

This paper builds and estimates a quantitative model of business cycle fluctuations and asset premia driven by changes in uncertainty.

We show that the Carry Trade exploits a static interest rate differential which is largely unrelated to the fact that currencies whose interest rates exceed their long-run average tend to appreciate (the Forward Premium Puzzle). The evidence is consistent with the presence of a static risk...

There are large and persistent productivity differences across firms within narrowly defined industries. This is especially true in poor countries. Why do productivity differences decline as the economy develops? In this paper I propose a theory where productivity differences exist because...

Standard spatial models of candidate competition suggest that better information about the location of the median voter produce policies closer to the median voter’s ideal point. In this paper we show that more precise information about voter preferences may produce counterintuitive...