We develop a theory linking “misallocation,” i.e., dispersion in static marginal products of capital (MPK), to systematic investment risks. In our setup, firms differ in their exposure to these risks, which we show leads naturally to heterogeneity in firm-level risk premia and, more...

We study the slot allocation problem where agents have quasi-linear single-peaked preferences over slots and identify the rules satisfying efficiency, strategy-proofness, and individual rationality. Since the quasi-linear single-peaked domain is not connected, the famous characterization of the...

We develop a theory linking “misallocation,” i.e., dispersion in marginal products of capital (MPK), to macroeconomic risk. Dispersion in MPK depends on (i) heterogeneity in firm-level risk premia and (ii) the price of risk, and thus is countercyclical. We document strong empirical support...

We develop a theory linking "misallocation," i.e., dispersion in marginal products of capital (MPK), to macroeconomic risk. Dispersion in MPK depends on (i) heterogeneity in firm-level risk premia and (ii) the price of risk, and thus is countercyclical. We document strong empirical support for...

We study the slot allocation problem where agents have quasi-linear single-peaked preferences over slots and identify the rules satisfying efficiency, strategy-proofness, and individual rationality. Since the quasi-linear single-peaked domain is not connected, the famous characterization of the...