How do job losers use default -- a phenomenon 6x more prevalent than bankruptcy
--as a type of “informal" unemployment insurance, and more importantly, what are
the social costs and benefits of this behavior?
The recent financial crisis has focused attention on the relationship between access to finance and international trade, triggering a burgeoning segment of the literature evaluating this link empirically.
Middle Eastern and North African (MENA) countries stand out in international comparisons of de jure obstacles to female employment and entrepreneurship. These obstacles manifest themselves in low rates of female labor participation, entrepreneurship, and ownership.
In this paper, we study the welfare consequences of imposing alternative regimes of
competition between two non-benevolent local governments that compete for mobile
firms which have private information on their degree of locational attachment or home
The literature on the evolution of impatience, focusing on one-person decision problems,
finds that evolutionary forces favor the more patient individuals. This paper shows that in
the context of a game, this is not necessarily the case.
We examine self-referential games in which there is a chance of understanding
an opponent’s intentions. Our main focus is on the interaction of two sources of
information about opponents’ play: direct observation of the opponent’s code-of-conduct,
and indirect observation of the opponent’s play in a repeated setting.
This paper introduces a measure of credit score performance that abstracts from the influence of "situational factors." Using this measure, we study the role and effectiveness of credit scoring that underlied subprime securities during the mortgage boom of 2000-2006.
We investigate whether race and ethnicity influenced subprime loan pricing during
2005, the peak of the subprime mortgage expansion. We combine loan-level data on the
performance of non-prime securitized mortgages with individual- and neighborhood-
level data on racial and ethnic characteristics for metropolitan areas in California
We revisit the role of limited commitment in a dynamic risk-sharing setting with private information. We show that a Markov-perfect equilibrium, in which agent and insurer cannot commit beyond the current period, and an infinitely-long contract to which only the insurer can commit, implement identical consumption, effort and welfare outcomes.
We examine the interaction between foreign aid and binding borrowing constraint for a recipient country. We also analyze how these two instruments affect economic growth via non-linear relationships. First of all, we develop a two-country, two-period trade-theoretic model to develop testable hypotheses and then we use dynamic panel analysis to test those hypotheses empirically. Our main findings are that: (i) better access to international credit for a recipient country reduces the amount of foreign aid it receives, and (ii) there is a critical level of international financial transfer, and the marginal effect of foreign aid is larger than that of loans if and only if the transfer (loans or foreign aid) is below this critical level.
Do parents alter their investment in their child’s human capital in response to changes in school inputs? If they do, then ignoring this effect will bias the estimates of school and parental inputs in educational production functions.
We study the optimal auditing of a taxpayer’s income in a dynamic principal- agent model of hidden income. Taxpayers in our model initially have low income and stochastically transit to high income that is an absorbing state.
This article examines the distributional burden of different price-point instant lottery games. Theoretical reasons exist for expecting higher-priced instant lottery games to be less regressive than lower-priced instant games.
Using a dynamic panel data framework, we investigate the relationship between the two major forms of terrorism and foreign direct investment (FDI). We then analyze how these relationships are affected by foreign aid flows.