First Draft: November 1, 2011 We propose a theory of endogenous firm-level volatility over the business cycle based on endogenous market exposure. Firms that reach a larger number of markets diversify market-specific demand risk at a cost. The model is driven only by total factor productivity...

This paper argues that there is a fundamental conflict between financial liberalization and private sector led development strategy in developing countries. Using a simple model of occupational choice with moral hazard, it shows that under financial liberalization banks may (i) fail to finance...

This paper argues that there is a fundamental conflict between financial liberalization and private sector led development strategy in developing countries. Using a simple model of occupational choice with moral hazard, it shows that under financial liberalization banks may (i) fail to finance...

We develop a model of a city populated by heterogeneous agents. Agents self-select into entrepreneurship, and entrepreneurs set up firms which hire workers. We characterize the equilibrium matching between firms and workers, as well as the within-city assignment of agents to locations. We then...

We develop a model of a city populated by heterogeneous agents. Agents self-select into entrepreneurship, and entrepreneurs set up firms which hire workers. We characterize the equilibrium matching between firms and workers, as well as the within-city assignment of agents to locations. We then...

We develop a monopolistic competition model with two sectors and heterogeneous agents who self-select into entrepreneurship, depending on entrepreneurial ability. The effect of market size on the equilibrium share of entrepreneurs crucially hinges on properties of the lower-tier utility function...

We develop a model of a city populated by heterogeneous agents. Agents self-select into entrepreneurship, and entrepreneurs set up firms which hire workers. We characterize the equilibrium matching between firms and workers, as well as the within-city assignment of agents to locations. We then...

In the present paper an empirical analysis will point out that austerity measures due to high levels of government debt as a percentage of GDP have (among others) a positive impact on social unrest measured by the number of strikes. The empirical findings of the present paper support the view of...

In the present paper an empirical analysis will point out that government debt as a percentage of GDP has a negative impact (among others) on banking profitability. This impact will be even worse when this debt as a percentage of GDP exceeds a certain critical level. The sample covers during the...

In this small paper author makes some comments on the relation between Income Distribution and the Government Debt as a percentage of GDP. It is estimated through a panel data model that optimum Income Distribution takes place at a critical level of Government Debt as a percentage of GDP....