This paper provides a unified framework for interpreting a wide range of interactions models which have appeared in the economics literature. A formalization taken from the statistical mechanics literature is shown to encompass a number of socioeconomic phenomena ranging from out of wedlock...

This paper explores the dynamics of income inequality by studying the evolution of human capital investment and neighborhood choice for a population of families. Parents affect the conditional probability distribution of their children's income through the choice of a neighborhood in which to...

This paper proposes a method of testing whether a time series is a martingale. The procedure develops an asymptotic theory for the shape of the spectral distribution function of the first differences. Under the null hypothesis, this shape should be a diagonal line. several tests are developed...

This paper explores the role of complementarities and coordination failure in economic growth. We analyze the evolution composed of a countable set of infinitely-lived heterogenous industries. Individual industries exhibit nonconvexities in production and are linked across time through localized...

This paper studies an economy in which incomplete markets and strong complementarities interact to generate path dependent aggregate output fluctuations. An economy is said to be path dependent when the effect of a shock on the level of aggregate output is permanent in the absence of future...

This paper explores the impact of incomplete markets and strong complementarities on the time series properties of aggregate activity. We consider an economy which consists of a large number of industries whose production functions both are nonconvex and exhibit localized technological...