We develop a quantitative framework to explain the relationship between aggregate/sector-level total factor productivity (TFP) and financial development across countries. Financial frictions distort the allocation of capital and entrepreneurial talent across production units, adversely affecting...

Existing skill-biased technical change theory predicts that differences in factor endowments will affect technology adoption and the return to skill. We document regional variation in endowments in the American past. We then estimate the returns to education using a new data source: a report...

We study the cross-country relationship between the relative price of tradables and income per capita. The theory developed is based on financial frictions and differences in the efficient scale of production across sectors. Countries with more severe financial frictions are more dependent on...

We provide a simple quantitative general equilibrium model of occupational choice with credit market frictions to analyze the aggregate and distributional effects of asset transfer programs. Asset transfer programs have a positive but transient effect on aggregate productivity, and a negative...

This paper analyzes the role of specialized high-skilled labor in the disproportionate growth of the service sector. Empirically, the importance of skill-intensive services has risen during a period of increasing relative wages and quantities of high-skilled labor. We develop a theory in which...

This paper examines a cost-reducing innovation to the delivery of "Self-Help Group" microfinance services. These groups typically rely on outside agents to found and administer the groups although funds are raised by the group members. The innovation is to have the agents earn their payment by...

This paper examines a cost-reducing innovation to the delivery of "Self-Help Group" microfinance services. These groups typically rely on outside agents to found and administer the groups although funds are raised by the group members. The innovation is to have the agents earn their payment by...

This paper examines the impact of roads on structural transformation and business composition theoretically and empirically. We develop a two-sector model of regional trade with endogenous firm entry that highlights two opposing forces. \textit{Ceteris paribus} lower trade costs in...