We examine the short- and long-term effects of urbanization, via favorable urban development policies, on income distribution and social welfare for a developing country. The urban manufacturing sector is characterized by imperfect competition and free entry. Urbanization shifts rural workers to...

Using a dual structure depicting a developing economy, this paper shows that an increase in asset inequality can lead to wage inequality between skilled and unskilled labor. In addition, increasing asset inequality raises the luxury goods price and hence the unemployment ratio. These effects...

For a developing economy with a given urban wage rate, globalization in capital markets strengthens labor unions. This result hinges on the fixed urban wage rate, which leads to a constant capital--labor ratio in the urban sector. Globalization via capital inflows not only enhances the...

This paper studies the impact of pay fairness on factor income and social welfare in a developing economy with both modern urban and traditional rural sectors. When urban workers become aware of income fairness, they use the expected urban wage and weighted average returns to capitalists as...

This research examines the implications of contingent claims models for empirical research on default. We focus on the probability of default over a short horizon given the current state of the world, i.e., the conditional probability of default, which more closely resembles the estimates of...

This study examines how applicants identified as Asian, Black or Hispanic differ in mortgage closing outcomes compared to the remaining applicants. First, the findings show that minority applicants are somewhat less likely to close a loan for purchase, but equally likely to close a loan for...

When a mortgage borrower becomes seriously delinquent (i.e., defaults), the lender initiates a time consuming and complex recovery process that may or may not result in foreclosure and eventual disposition of the real estate collateral (REO). This research studies this transition process for a...