We study asset-tested unemployment insurance in an incomplete markets model with moral hazard during job search. Optimal asset testing is weak and yields negligible welfare gains. The optimal replacement rate of an unemployed worker with zero liquidity is 9 percentage points higher than that of...

Capital reallocation creates excess volatility in investment in many two-country open economy models. Convex adjustment costs to capital have become a standard tool to deal with this. However, current microeconomic investment models feature non-convex adjustment costs as the dominant friction....

This paper develops a dynamic structural model of migration decisions that is aggregated to describe the behavior of interregional migration. Our structural approach allows us to deal with dynamic self-selection problems that arise from the endogeneity of location choice and the persistence of...