We investigate empirically the extent of misreporting in a poverty-alleviation program in which self-reported information, followed by a household visit, is used to determine eligibility. Underreporting may be due to a deception motive, and overreporting to an embarrassment motive. We find that...

In this paper, I explain two "puzzles" which have been observed in firm level data. (1) Firms which display a high sensitivity of investment to cash flow (commonly believed to be an indicator of liquidity constraints) usually have large unutilized lines of credit which, presumably, could be used...

We study the aggregate effects of a social security reform in a large overlapping generations model where markets are incomplete and households face uninsurable idiosyncratic income shocks. We depart from the previous literature by assuming that, because of lack of commitment in the credit...

Our companion paper introduced a new general equilibrium concept, called PDME, in which a natural monopoly maximizes its industry's surplus. While PDME's are always efficient, decentralization and existence sometimes fail under increasing returns to scale. This paper derives conditions under...

In this paper we show how short term contracts can reproduce the payoffs under optimal long term renegotiation proof contracts in the context of adverse selection. The result requires that the principal and the agent form a joint venture in period one. It also requires the existence of a...

I provide new existence and welfare results for the Kiyotaki-Wright model (JPE, 1989). Previous work on the model has focused almost exclusively on steady-states and has established the existence of multiple steady-states. Moreover, welfare comparisons among steady-states are of dubious...

Participation in a social program, like that in clubs and other social organizations, is the result of a process in which an agent first learns about the requirements, benefits, and the likelihood of acceptance, applies for membership, and finally is accepted or rejected. At each stage of the...

Consider a one step forward looking self-referential model with a one dimensional state variable where the information set available to agents when they make their forecast for the next period includes the current realization of an extrinsic random process but does not include the current value...

This paper investigates the effect of a generous demogrant for the elderly that started in 2001 in Mexico City on the labor supply and time use of the elderly and of non-elderly family members who live with them. Using data for the period 2000-2004 and a triple differences approach, I find that...

Recently, much of the empirical research on money demand has been centered on the question of whether the demand for money is a stable relationship. The importance of this issue is underscored when modeling the demand for narrow money in countries such as Mexico, given that its economic...