model developed by Klette and Kortum (2004) and an equilibrium search model of the labor market with job to job flows introduced by Mortensen (2003). In the construction, a continuum of intermediate product and service varieties are produced with labor that serve as inputs in the production of a...

the problem of general vs. firm-specific human capital investments.

When bids do not represent binding commitments, the use of a first price sealed bid auction favors those bidders who are less penalized from reneging on their bids. These bidders are the most likely to win but also the most likely to default on their bid. In this paper I study theoretically two...

This paper investigates whether the secular process of Structural Change - i.e. the broad shift away from manufacturing and towards services during the post war period - can simultaneously account for the Great Moderation and provide a mechanism for its unraveling. Based on detailed US sectoral...

value exists and displays more severely in smaller samples.

This paper sets up and computes a stochastic neoclassical growth model where agents face uninsurable idiosyncratic labor income risk and heterogenous discount factors. Households value government purchases which are financed by income taxes. The government cannot commit to future streams of...

much.

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...