A relatively low tertiary education wage premium and a large occupational mismatch are two salient features of the Spanish labor market that distinguish it with respect to the labor markets in other developed countries. In this paper we provide an equilibrium model of the labor market with...

We study the effect of market incompleteness in a search model of the labor market in which the distribution of idiosyncratic uncertainty is determined endogenously. We show that costly search introduces a wealth effect at low levels of wealth such that poor agents may find optimal not to look...

We study the effect of borrowing limits on welfare in several versions of exchange and production economies. There is a "quantity" effect of a larger borrowing limit which is beneficial for liquidity constrained agents, but essentially irrelevant otherwise. There is also a ``price effect" which...

In this paper we explore the accumulation of capital in the presence of limited insurance against idiosyncratic shocks, borrowing constraints and endogenous labor supply. As in the exogenous labor supply case (e.g. Aiyagari 1994, Huggett 1997), we find that steady states are characterized with...

This paper develops a real business cycle model characterized by a large number of agents facing idiosyncratic employment shocks and borrowing constraints. In particular, I use numerical methods to study the statistical properties of aggregate variables in equilibrium under both complete and...

Motivated by the dollarization debate in Mexico, we estimate an identified vector autoregression for the Mexican economy, using monthly data from 1976 to 1997, taking into account the changes in the monetary policy regime that occurred during this period. We find that (i) exogenous shocks to...

This paper develops a dynamic Heckscher-Ohlin model and studies the interaction between international trade and wealth distribution dynamics. I also study how differences in the cost of financial intermediation among countries may affect the pattern of trade and wealth dynamics. Relative to the...

We study the effect of borrowing limits on welfare in several versions of exchange and production economies. There is a "quantity" effect of a larger borrowing limit which is beneficial for liquidity constrained agents, but essentially irrelevant otherwise. There is also a "price effect" which...