We develop a general equilibrium model in which heterogeneous entrepreneurs produce output in the presence of financing constraints. We model granular uncertainty as the shocks that affect the uncertainty in future idiosyncratic productivity without changing the cross-sectional dispersion of...

This paper presents a dynamic framework which implements risk as a continuous variable into the proximity-concentration trade-of concept. Additionally firms have the possibility to postpone their investment decision which gives them the possibility to collect further information about the...

Can stock market bubbles accelerate long term growth? Do such bubbles indicate irrational behavior? This paper studies the effect of innovation uncertainty on the concomitant time path of firm valuations, technology adoption and growth in a setting that incorporates positive network...

In der Oekonomik lassen sich viele Beispiele anfuehren, in denen zwischen der Durchfuehrung einer Massnahme und ihrer Wirkung auf eine Zielvariable eine bestimmte Zeit verstreicht. Diese Totzeit bringt erhebliche analytische Schwierigkeiten mit sich, zu deren Ueberwindung das Instrument der...

This paper analyzes the drivers of international waves in capital flows. We build on the literature on “sudden stops” and “bonanzas” to develop a new methodology for identifying episodes of extreme capital flow movements using quarterly data on gross inflows and gross outflows,...

This paper investigates whether "trade policy uncertainty" (TPU), even absent changes in actual policy, may have an adverse effect on foreign direct investment. The paper focuses on the case of Mexico, where we observe a plausibly sharp and exogenous increase in TPU vis-à-vis a large trading...

We study a novel policy tool-interest rate uncertainty-that can be used to discourage inefficient capital inflows and to adjust the composition of external account between shortterm securities and foreign direct investment (FDI). We identify the trade-offs faced in navigating between external...

This paper investigates the effect of uncertainty on FDI flows into the Mexican manufacturing sector during the period 2007-2015. Using a panel of manufacturing subsectors, we estimate a model by System GMM that includes domestic and external factors, as well as idiosyncratic (i.e. that affect...