Why don't poor countries adopt more productive technologies? Is there a role for policies that coordinate technology adoption? To answer these questions, we develop a quantitative model that features complementarity in firms' technology adoption decisions: The gains from adoption are larger when...

Market failures provide a rationale for policy intervention. But policies are often hard to alter once in place. We argue that this inertia can result in well-intended policies having sizable negative long-run effects on aggregate output and productivity. In our theory, financial frictions...

We review the empirical evidence on microfinance and asset grants to the ultra poor or microentrepreneurs and use quantitative economic theory to account for this evidence. Properly executed, these interventions can help segments of the population increase their income and consumption, but...

Why are financial crises associated with a sustained rise in unemployment? We develop a tractable model with frictions in both credit and labor markets to study the aggregate andmicro-level implications of a credit crunch---i.e., a sudden tightening of collateral constraints. When we simulate a...