A new wave of technological innovations, often called 'fintech,' is accelerating change in the financial sector. What impact might fintech have on financial services, and how should regulation respond? This paper sets out an economic framework for thinking through the channels by which fintech...

We propose an industry-level index of capital liquidity - defined as the share of used capital in aggregate industry capital expenditure - that relates (inversely) to sunkenness of capital investment. We then test the effect of capital liquidity on the dispersion and mean of industry...

Sunk costs for R&D are an important determinant of the level of innovation in the economy. In this paper I recover them using a Markov equilibrium framework. The contribution is twofold. First, a model of industry dynamics which accounts for selection into R&D, capital accumulation and...