We document the cyclical dynamics in the balance sheets of US leveraged financial intermediaries in the post-war period. Leverage has contributed more than equity to fluctuations in total assets. All three variables are several times more volatile than GDP. Leverage has been positively...

Countries' concerns with the value of their currency have been extensively studied and documented in the literature. Capital controls can be (and often are) used as a tool to manage exchange rate áuctuations. This paper investigates whether countries can benefit from using such tool. We develop...

In search theory, an important distinction can be drawn between models with competitive search and with random search; empirical work on job search models overwhelmingly assume random search. This paper uses linked register data on workers and rms to explore patterns of wages at job to job...

We document sizeable changes over time and across countries in the comovement of output and unemployment over the business cycle. To a large extent, these changes reflect the evolving cyclical behavior of labor productivity (output per hour worked). For the typical country, productivity shifted...

Many less developed countries are characterized by inefficient and fairly unstable policies. It is well understood that inefficient policies can result, in some cases, in lower measured productivity. When policies have a stochastic component, fluctuations can add to the standard inefficiencies...

Hazan (2009) performs empirical analysis based on the conjecture that a necessary condition for higher life expectancy to cause longer schooling years is that it also increases lifetime labor supply, and reaches controversial conclusions. We aim to examine the theoretical validity of Hazan's...

I argue that China during the Song Dynasty (960 – 1279 AD) (Song China hereafter) experienced the onset of an Industrial Revolution, preceding England’s by several centuries. The concept of Industrial Revolution is extended to include two types – one non-science based and...

We present a positive theory of capital market frictions that raise the cost of capital for new firms and lower the cost of capital for incumbent firms. Capital market frictions arise from a political conflict across voters who differ in two dimensions: (i) a fraction of voters owns capital, the...

Since 1989, creditor countries have provided debt relief to developing countries worth more than 100 billion US dollars. Prominent lobby groups are campaigning for a further 400 billion US dollars in debt relief to be provided in the near future. How much could developing country’s gain...

Infrequent but dramatic episodes of outright default on domestic sovereign debt are an important historical fact that remains unexplained. We propose an incomplete-markets, heterogeneous-agents model in which domestic default can be optimal for a utilitarian government that responds to...