Unobserved ability heterogeneity has long been postulated to play a key role in human capital development. Traditional strategies to estimate education production functions do not allow for varying role or development of unobserved ability as a child ages. Such restrictions are highly...

In this paper, we first describe the 1990 DEED, the most recently constructed matched employer-employee data set for the United States that contains detailed demographic information on workers (most notably, information on education). We then use the data from manufacturing establishments in the...

In this paper we examine how to account for growth when new inputs are being created. In particular, we obtain a decomposition of growth into that due to a higher quantity of existing inputs, and that due to a greater range of inputs. This decomposition is first obtained for a single firm, with...

Capital income tax policy affects investment by the parent and affiliates of multinational corporations (MNCs). In a model in which technical advances are embodied in new capital, investment will translate directly into productivity gains. In this paper, I use this framework to guide the growth...

Experimental studies rarely consider the shape and nature of the education production function, which is useful for deriving optimal levels of input substitution in increasingly resource constrained environments. Because of the rapid expansion of EdTech as a substitute for traditional learning...

This paper analyzes data from Project STAR, an experiment in which 11,600 Tennessee kindergarten students and teachers were randomly assigned to one of three types of classes beginning in the 1985-86 school year: small classes (13-17 students), regular-size classes (22-25 students) teacher's...

We propose a novel method to estimate dynamic equilibrium models with stochastic volatility. First, we characterize the properties of the solution to this class of models. Second, we take advantage of the results about the structure of the solution to build a sequential Monte Carlo algorithm to...

The paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages. Explicit solution of the wage-setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare, expected output, and the expected terms of trade....

Techniques of regulated Brownian motion are used to analyze the behavior of the exchange rate when official policy reaction functions are subject to future stochastic changes. We examine exchange-rate dynamics in alternative cases where the authorities promise (i) to confine a floating rate...

This paper estimates the parameters of the ideas' production function central to recent models of economic growth. We do so by evaluating the determinants of international' patenting rates across the OECD, where an international patent is one granted by the U.S. patent office to a foreign...