This paper presents a dynamic general equilibrium model with default and collateral requirements. In contrast with previous literature, our model allows for liquidity contractions and general prepayment specifications. We show that liquidity substantially affects credit and prepayment risks, and...

A recent theoretical literature has given relevance to the study of the relationship between product mix changes and firm productivity. In this paper, taking advantage of a rich dataset for manufacturing plants in Chile during the period 1996-2000, we use matching techniques and a difference in...

This paper analyzes the quantitative relevance of additive, multiplicative and data uncertainty in the implementation of Chile’s monetary policy. For the analysis of data uncertainty we focus on the uncertainty associated with the estimation of the output gap using real-time data and various...

In spite of vast theoretical developments on the issue of price stickiness in the context of macroeconomic models, papers assessing the empirical validity of such hypothesis using micro-data are scarce. Most of these few attempts have been done for developed economies. The few papers that focus...

We use a panel database constructed from Chilean IRS data to study firm creation and destruction. As expected, larger and more productive firms are less likely to be destroyed; and (also as expected) they are less likely to be created than smaller and less productive firms. They are more likely to...

We construct an economy with heterogeneous entrepreneurs in productivity, wealth and also size, with contracting originating from a hidden action problem. This economy generates dual margins with high productivity firms owned by poor entrepreneurs being incentive constrained and low productivity...

This paper provides new evidence on intergenerational mobility in Chile. Income mobility elasticities for Chile are the range of 0.52 to 0.67, which stand as fairly high in comparison with the international evidence. We also find that educational mobility is lower for the younger cohorts,...

There is a broad consensus that macroeconomic “fundamentals” are a most relevant variable to enhance economic development. However, there is wide misunderstanding about (i) which are the “sound macroeconomic fundamentals", contributing to a sustained high economic growth, and (ii) how to...

Este estudio tiene por objetivo determinar si el tamaño de la familia, el orden de nacimiento y el espacio temporal entre hermanos tienen efecto sobre los logros futuros de los individuos. En orden a abordar el problema en cuestión, se analizaron datos obtenidos de la Encuesta deProtección...

This paper develops a simple analytic framework to analyze the effects of capital surges and sudden stops in the financial account of the balance of payments in emerging economies. In this model, capital inflows are largely exogenous to the recipient economies, they are very large when scaled to...