In the last two decades, the Peruvian economy exhibited rapid growth. Moreover, the composition of the labor force improved in terms of education and experience, two variables which are typically associated to higher human capital. The average worker in 2012 had a higher level of education and...

We study how consumers allocate debt across credit cards they already hold using new data on credit card activity for a representative sample of consumers with two homogeneous cards in Mexico. We find that relative prices are a very weak predictor of the allocation of debt, purchases, and...

Consumer protection in financial markets in the form of information disclosure is high on governments agendas, espite the fact that the empirical evidence on its effectiveness is scarce. To measure the impact of Truth-in-Lending-Act-type disclosures on default and indebtedness, as well as of...

We are first paper to study the economic effects of drug-trafficking organization violence. We exploit the manyfold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug-related homicides on house prices. We use an...

In this paper we develop a discretized version of the dynamic programming algorithm and derive error bounds for the approximate value and policy functions. We show that under the proposed scheme the computed value function converges quadratically to the true value function and the computed...

I establish new existence and welfare results for the Kiyotaki-Wright model (JPE, 1989). I show that good intrinsic properties are not necessary for an object to be universally accepted in equilibrium. Furthermore, bad objects may be socially desirable as media of exchange. One result is that...

We take a game-theoretic approach to the analysis of juries by modelling voting as a game of incomplete information. Rather than the usual assumption of two possible signals (one indicating guilt, the other innocence), we allow jurors to perceive a full spectrum of signals. Given any voting rule...

How will the distribution of welfare, consumption and leisure across households be affected by social security reform? This paper addresses this question for social security reforms with a two-tier structure by comparing steady states under a realistic version of the current US system and under...

In a simple public good economy, we propose a natural bargaining procedure whose equilibria converge to Lindahl allocations as the cost of bargaining vanishes. The procedure splits the decision over the allocation in a decision about personalized prices and a decision about output levels for the...

Most monetary growth models have a relatively simple structure. There are two assets, money and capital, and money is held either because it earns the same real return as capital, or because it is ascribed an advantage in transacting that is not explicitly modelled. Financial market institutions...