Using tax abatements, financial incentives, and public investments to attract (or retain) firms is the primary economic development tool for many local governments. Often local job creation policies focus on increasing capital through grants, low-interest financing, and other economic...

This paper is about “Capital in the Twenty-first Century” by Thomas Piketty. It identifies his central macroeconomic claims and examines them, arguing that the contentions are theoretically and empirically unwarranted.

Using tax abatements, financial incentives, and public investments to attract (or retain) firms is the primary economic development tool for many local governments. Often local job creation policies focus on increasing capital through grants, low-interest financing, and other economic...

Why is capital reallocation across firms procyclical and more volatile than investment? To answer the question, this paper develops a tractable dynamic general equilibrium model. In the model, firms face idiosyncratic productivity risks, and they are subject to partial capital irreversibility...

We present a model of financial market liquidity provided by financially constrained intermediaries. We show that market liquidity increases with the level of intermediary capital. We also characterize conditions under which intermediaries play a stabilizing or destabilizing role in markets....

I study the real effects of benchmarking in the professional fund management industry. Stocks of the productive sector are traded in a competitive equity market. Investors delegate their portfolio decisions to managers whose performance is benchmarked against an aggregate stock market index....