of the noise distribution, utility function and reservation utility.

There are two stark views of the forces driving aggregate real exchange rates in the short-run. One view is that all of the variance is accounted for by non-traded items in the CPI basket (the classical dichotomy view), the other, due to Engel (1999), claims the opposite, with all of the...

Instead, I present and test a model where bilateral trade liberalization induces the most productive firms (exporters) to adopt skill-biased new technologies. I test the model in the context of a regional free trade agreement, MERCOSUR. I find that the increase in the relative demand of skilled...

positions that require small reallocations. In such circumstances, welfare can increase if the government steps in, purchases private assets on its own account, and resells them when the economy recovers.

We document cross-country differences in informal activity, government policies and institutions using a data set covering 127 countries. Five key facts emerge from this data set. Better institutions are associated with lower inflation, higher income tax rates and less informal activity. Related...

productivity: a new technology is "more risky" and more productive on average. In this context, the adoption of the new technology from a low level of income (close to subsistence) generates a gradual increase in the investment to output ratio.

At any given point of time in an actual economy, some individuals hold more money than other individuals do. This non-degenerate distribution of money holdings among individuals is a rationale for a range of policies designed for reallocating liquidity among individuals. However, monetary theory...

Between 1958 and 1961, China experienced one of its worst famines in history. Birth rates plummeted during these years, but recovered immediately afterwards. The famine-born cohorts were relatively scarce in the marriage and labor markets. The famine also adversely affected the health of these...

there is enough cross-sectional variation of the observed states.