Why are bubbles harmful to the economy? According to a recent literature on rational bubbles, the problem is the burst that causes a misallocation of funds and triggers a recession. This paper proposes a theory of rational ...

The purpose of this work is to study the role for government in mitigating capital misallocation. We develop an entrepreneurship model in which heterogeneous producers face collateral constraints on production, but can ...

We develop a multi-sector model of economic growth to explain the distinct patterns of structural change in manufacturing sectors in industrialized countries and those in developing and emerging industrial countries. To ...

Childcare subsidies often attempt to allow low income families to work, but a problem arises when they generate unforeseen negative general equilibrium consequences. This paper focuses on a law in Chile that forces firms ...

Esse trabalho investiga a relação entre a política de expansão do crédito público após a crise financeira de 2008 e o seu efeito na alocação de recursos e produtividade setorial no Brasil. Usando um método similar a Hsieh ...

High inflation disrupts the organization of markets. This paper relates those “Industrial Organization” effects of inflation to the poor growth performance of high-inflation economies, in the context of a Schumpeterian ...

What is the efficiency cost of rent-seeking activities in Argentina? In this paper, I quantitatively show that rent-seeking activities in the form of bribes have aggregate effects through two channels. First, they generate ...