The problem of efficient sharing of a resource is nearly ubiquitous. Except for pure public goods, each agent's use creates a negative externality; often the negative externality is so strong that efficient sharing is impossible in the short run. We show that, paradoxically, the impossibility of...

I examine a version of the Lagos and Wright (2005) monetary model where coercive lump-sum taxation is infeasible. Despite this restriction, I demonstrate that the first-best allocation remains implementable under an appropriately designed monetary policy; at least, if agents are sufficiently...

The international trade literature finds strong links between firm growth and export decisions. In spite of this, the literature analyzing cross-country differences in firm growth commonly abstracts from trade. We develop a tractable, dynamic model to understand the consequences of this...

In the past two decades, academic research has produced massive evidence of the beneficial role of financial development for growth and the allocation of investment. Our current vision, however, is dominated by instances of dysfunctional behavior of financial markets associated with acute and...

We present new evidence on the presence of both small and large price changes in individual price records from the CPI both in France and in the US. After correcting for measurement error and cross-section heterogeneity we find that the size distribution of price changes has a positive excess...

We use a repeated survey of a large sample of clients of an Italian bank to measure possible changes in investors’ risk aversion following the 2008 financial crisis. We find that both a qualitative and a quantitative measure of risk aversion increase substantially after the crisis. These...

Would citizens coordinate to punish a government when they observe suspicious behavior? This paper shows that under some circumstances such coordination is impossible. This fact has important implications for policy discretion. We study an environment with the following characteristics: 1) the...

Third party punishment is crucial for sustaining cooperative behavior. Still, little is known about its determinants. In this paper we use laboratory experiments to investigate a long-conjectured interaction between group identification and bystanders' punishment preferences using a novel...

Given a scalar random variable Y and a random vector X defined on the same probability space, the conditional distribution of Y given X can be represented by either the conditional distribution function or the conditional quantile function. To these equivalent representations correspond two...

This paper reports on experimental tests of an instantiation of the Lucas asset pricing model with heterogeneous agents and time-varying private income streams. Central features of the model (infinite horizon, perishability of consumption, stationarity) present difficult challenges and require a...