In this paper, we analyze how large institutions differ from other investors and the implications that these differences have for stock returns, market liquidity, and corporate governance. We find that large institutional investors -- a category including all managers with greater than $100...

Does the economic model of optimal punishment explain the variation in the sentencing of murderers? As the model predicts, we find that murderers with a high expected probability of recidivism receive longer sentences. Sentences are longest in murder types where apprehension rates are low, and...

Scholars in many fields of economics have become very interested in Silicon Valley-style agglomeration of individual industries. These agglomerations are striking features of the economic landscape and may provide insightsinto the nature of the increasing returns technologies and spillovers that...

This paper addresses the complex relationship between geography and macreeconomic growth. We investigate the ways in which geography may matter directly for growth, controlling for economic policies and institutions, as well as the effects of geography on policy choices and institutions. We find...

Urban economics has traditionally viewed cities as having advantages in production and disadvantages in consumption. We argue that the role of urban density in facilitating consumption is extremely important and understudied. As firms become more mobile the success of cities hinges more and more...

We argue that allowing for the possibility of a self-fulfilling panic helps understand several features of the recent Mexican Crisis. We present a simple model too explain how and why multiple equilibria can occur for some levels of reserves or debt, but not for others.

This paper reviews the literature on the relationship of economic growth to the education levels of the labor force. The enphasis is on Ben-Porath's contribution to some of the issues in this field: the endogeneity of schooling, the role of the public sector as an "absorber" of educated labor,...

In a self-confirming equilibrium, each player correctly forecasts the actions that opponents will take along the equilibrium path, but may be mistaken about the way that opponents would respond to deviations. Intuitively, this equilibrium concept models the possible steady states of a learning...

Tunnelling is defined as the transfer of assets and profits out of firms for the benefit of their controlling shareholders. We describe the various forms that tunnelling can take, and examine under what circumstances it is legal. We discuss two important legal principles--the duty of care and...