How costly is the misallocation of production that we might expect to result from distortions such as market power …, incomplete contracts, taxes, regulations, or corruption? This paper develops new tools for the study of misallocation that place … misallocation and to quantify the welfare losses that it causes. We then consider an application in which thousands of firms …

the same time that the relative supply of workers with more years of schooling has increased, misallocation of resources … characteristics and simulates a counterfactual earnings distribution in the absence of misallocation. Under the counterfactual …