Motivated by evidence from the micro data that the type of financial frictions faced by individuals varies across regions within countries, we develop a general equilibrium framework that encompasses different micro financial underpinnings. We use it to compare the implications of two concrete...

We study optimal dynamic Ramsey policies in a standard growth model with financial frictions. For developing countries with low financial wealth, the optimal policy intervention increases labor supply and lowers wages, resulting in higher entrepreneurial profits and faster wealth accumulation....

Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across...

Recent papers argue that the misallocation of resources can explain large cross-country TFP differences. This argument is underpinned by empirical evidence documenting substantial dispersion in the marginal products of resources, particularly capital, in developing countries. But why does...

Does lifecycle human capital accumulation vary across countries? If so, why? This paper seeks to answer these questions by studying U.S. immigrants, who come from a wide variety of countries but work in a common labor market. We document that returns to potential experience among U.S. immigrants...

This study uses newly available large-sample micro data to document that the wage increase associated with increasing worker experience is lower for poorer countries. By taking this fact into account when calculating aggregate human capital, we find that human capital can explain a substantially...

I study the implications of the limited enforceability of credit contracts for inequality and economic growth. I introduce limited enforcement into a deterministic neoclassical growth model. Two types of agents differ in their initial wealth, ability and patience and each operate a private firm....

We study a class of continuous time heterogeneous agent models with idiosyncratic shocks and incomplete markets. This class can be boiled down to a system of two coupled partial differential equations: a Hamilton-Jacobi-Bellman equation and a Kolmogorov Forward equation, a system that Lasry and...

Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across...