market frictions over time with self-financing. With intermediate levels of frictions in the capital market, welfare costs of market incompleteness have a U shape against the persistence of idiosyncratic shocks. The right arm of the U reflects the difficulty of self-insurance against very...

2. Allowing entrepreneurs to move across borders. We find that entrepreneurs who are highly-talented but financially constrained in the financially less developed country migrate to the more developed country to take advantage of better financial markets. We interpret this outcome as brain...

by conditional first moments.

What are the micro and macro implications of a credit crunch? We study this question in a model where heterogeneous entrepreneurs can finance their investment by borrowing subject to collateral constraints and/or by using internal funds. We discipline our theory by requiring that the size...

This project uses a randomized field experiment in Egypt to examine the channels through which increasing market access can drive economic growth and reduce poverty. We focus on a particular export promotion intervention designed to match Egyptian Artisan carpet makers with Western buyers and...

"We quantify the role of financial frictions and the initial misallocation of resources in explaining development dynamics. Following a reform that triggers efficient reallocation of resources, our model economy with financial frictions converges slowly to the new steady state-it takes twice as...