This study attempts to understand the growth of services & informal sector’s capital formation, by modelling the formal-informal sector value chain in an economy with goods, asset and labour market segmentation. It considers a developing economy with a large informal sector and splits the...

This paper proposes a new way to model behavioral agents in dynamic macro-financial environments. Agents are described as neural networks and learn policies from idiosyncratic past experiences. I investigate the feedback between irrationality and past outcomes in an economy with heterogeneous...

We consider a labour market with risk averse workers, directed search and asymmetric information in which firms can commit to wage contracts but not to retain workers. The model predicts that in downturns i) firms smooth wages of incumbent workers at a level sufficient to ensure they are not...

The foreign tax credit is a cornerstone of the United States’ international tax regime and enjoys broad bipartisan support. Yet despite its enduring popularity, careful analysis reveals that the foreign tax credit is surprisingly arbitrary. Taxes are creditable in their entirety or not at all,...

There is empirical evidence and objective argument, which justifies the core functioning of money in economic growth and its correlation to the development of a Nation, which equally establishes the reason for the relevant role of Banks in every economy. The underpinning of this research is to...

We show that an increase in the cost of unskilled labor leads to more labor-saving innovation. Larger minimum wage increases are associated with larger increases in automation patent applications and citations received by automation patents. These findings are stronger in states with a higher...

Government bureaus with higher percentages of furloughed employees during the 2013 government shutdown experienced more employee turnover for two years after the shutdown. This lost workforce was not replenished after employee exits stabilize, at least not within four years after the shutdown....

This paper offers a new perspective on why business groups are formed. Specifically, we ask if the expectation of a government bailout lowers group-affiliated firms’ cost of capital. Using a quasi-natural experiment, we show that group-affiliated firms paid lower interest when a government...

In this paper, we derive a representation for the value process associated to the solutions of FBSDEs in a jump-diffusion setting under multiple probability measures. Motivated by concrete financial problems, the latter representations are then applied to devise a generalization of the change of...