with theories of biased technological adoption but hard to rationalize in a neoclassical framework.

We investigate the welfare effects of vertical integration in U.S. multichannel television markets. Vertical integration in this market can enhance efficiency by aligning investment incentives and/or reducing double marginalization, but can also increase market power by encouraging raising...

Aging populations and increasing health-care costs will lead to an explosion in costs from long-term care (LTC) for permanently disabled elderly citizens. Governments are considering and implementing different kinds of policy responses, among them government-provided minimal care combined with...

This paper develops methods to study the evolution of agents' expectations and uncertainty in general equilibrium models. A central insight consists of recognizing that the evolution of agents' beliefs can be captured by defining a set of regimes that are characterized by the degree of agents'...

This is a theory of endogenous volatility over the business cycle based on firm-level intangible expenditures. We propose a firm dynamics model with endogenous market participation. Firms that incur higher intangible expenses are able to serve more markets and diversify market-specific demand...

Abstract

We study the dynamics of how private information is resolved in credit markets and its dependence on systematic uncertainty in collateral value. We develop a model in which all borrowers have verifiable income that can be collateralized, but only good borrowers have additional income that is...

U.S. financial institutions have traditionally insured the typical U.S. household against persistent shocks to U.S. inflation through the U.S. mortgage market. The bond risk premium is effectively the price of long-run inflation risk insurance charged by these U.S. intermediaries. Starting in...

This paper develops a theory of the formation and evolution of chains of production. Entrepreneurs search for production techniques that use alternative sets of inputs, which are in turn produced by other entrepreneurs. The value of a technique depends both on its inherent productivity and on...

We characterize an international production economy in which (1) agents have Epstein and Zin (1989) preferences, (2) international productivity frontiers are exposed to both short- and long-run shocks, and (3) consumption features a larger degree of home bias relative to investment. Under our...