How efficiently are physical and human capital allocated across countries? Observing
differences in the countries' ratios of physical and human capital to output is not conclusive
evidence of distortions since those differences may be driven by factor intensity differences
in the countries' production functions.
This paper analyzes the sources of the racial difference in the intergenerational transmission of human
capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce.
Consider the following facts. In 1950, the richest countries attained an average of 8 years
of schooling whereas the poorest countries 1.3 years, a large 6-fold difference. By 2005, the
difference in schooling declined to 2-fold because schooling increased faster in poor than in
Latin America has had striking changes in economic performance over time. Following the
recession and debt crises of the early 1980’s, consumption declined for about ten years and consumption per-capita in the year 2004 was roughly the same as it was in 1980.
This article develops time-series models to represent three alternative, potential monetary policy regimes as monetary policy returns to normal. The first regime is a return to the high and volatile inflation rate of the 1970s.
This paper evaluates the most appropriate ways to model diffusion and jump features of high-frequency exchange rates in the presence of intraday periodicity in volatility. We show that periodic volatility distorts the size and power of conventional tests of Brownian motion, jumps and (in)finite activity.
We study the roles private information and capital accumulation play in the structure of
partnerships. Partnerships are ventures formed with capital contributions from two members
who initially share ownership of a business.
This paper provides a general framework for the quantitative analysis of
stochastic dynamic models. We review convergence properties of some
numerical algorithms and available methods to bound approximation errors.
At an aggregate level, formal default via bankruptcy and informal default via delinquency
are both quantitatively important in consumer credit markets. In this paper,
we use a variety of microeconomic data sources to construct a salient set of facts on
the use of unsecured debt and both formal and informal default.
What is the role of a country’s financial system in determining technology adoption? To examine
this, a dynamic contract model is embedded into a general equilibrium setting with competitive