The New Keynesian Phillips Curve is at the center of two raging empirical debates. First, how can purely forward looking pricing account for the observed persistence in aggregate inflation. Second, price-setting responds to movements in marginal costs, which should therefore be the driving force...

We show that international consumption risk sharing is significantly improved by capital flows, especially portfolio investment. Concomitantly, we show that poor institutions hamper risk sharing, but to an extent that decreases with openness. In particular, risk sharing is prevalent even among...

We document that the deregulation of bank branching restrictions in theUnited States triggered a reallocation across sectors, with end effectson state-level volatility. This change in state-level volatility cannotbe explained simply by shifts in sector-level returns and volatility. Areallocation...

We estimate a version of the Melitz and Ottaviano [Melitz, Marc J. and Ottaviano, Giannnarco I.P., 2008, Market size, trade, and productivity, Review of Economic Studies 75(l), pp. 295-316.] model of international trade with firm heterogeneity. The model is constructed to yield testable...

We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that established time series and panel methods substantially exaggerate the persistence of real exchange rates because of heterogeneity in the dynamics of disaggregated relative prices. When...

We present, extend and estimate a model of international trade with firm heterogeneity in the tradition of Melitz (2003) and Melitz and Ottaviano (2005). The model is constructed to yield testable implications for the dynamics of international prices, productivity levels and markups as functions...

We show that since 1994, branching deregulations in the U.S have signi…cantly af-fected the supply of mortgage credit, and ultimately house prices. With deregulation,the number and volume of originated mortgage loans increase, while denial rates fall.But the deregulation has no effect on a...

We revisit the debt overhang question. We first use non-parametric techniques to isolate a panel of countries on the downward sloping section of a debt Laffer curve. In particular, overhang countries are ones where a threshold level of debt is reached in sample, beyond which (initial) debt ends...