firms have to learn their productivity. We match our model with the salient features of the data and show that our model …

This paper studies the implications of perceived default risk for aggregate output and productivity. Using a model of … allocation. The theoretical framework suggests an aggregate measure of the impact of credit market frictions based on firm … credit across firms with heterogeneous productivity. Further, we find that these losses accounted for over half of the …

We develop a theory linking "misallocation," i.e., dispersion in marginal products of capital (MPK), to macroeconomic … productivity by as much as 6%, suggesting large "productivity costs" of business cycles. …

Minimum wages alter the allocation of firm-idiosyncratic risk across workers. To establish this result, we focus on …