This paper models a family business as a closely-held technology that cannot be contracted upon. Each generation can either bequeath the business to the next generation, or it could sell it through a financial intermediary and bequeath the revenue.

We explore how the introduction of habit preferences into the simple intertemporal consumption-based capital asset pricing model "solves" the equity premium and risk-free rate puzzles. Our exploration employs spectral utility functions that decompose agents' preferences for consumption...

In this paper, we examine the robust Wald test statistic for SUR systems with adding up restrictions where the same explanatory variables are present in all equations and where heteroskedasticity and/or autocorrelation of unknown forms may be present. For this case, the coefficients are usually...

A widely cited failing of real business cycle models is their inability to account for the cyclical patterns of financial variables. Perhaps less well known is the fact that the return to capital and equity are identical in the neoclassical growth model. This paper constructs a measure of the...

This paper deals with a classic development question: how can the process of economic development – transition from stagnation in a traditional technology to industrialization and prosperity with a modern technology – be accelerated? Lewis (1954) and Rostow (1956) argue that the pace of...

Three central observations motivate this paper. First, there is little variation in the fraction of unskilled workers between rich and middle income countries. This occurs despite well-known, large differences in output per worker. Among a set of rich countries, unskilled workers 25 and older,...