/pdf/convex-analysisnoer-san-nojin-zhan-nituite-5dl2rbmoyr.pdf

Convex Analysisの二,三の進展について

https://www.uh.edu/%7Ebsorense/RestucciaRogersonRED2008.pdf

Policy distortions and aggregate productivity with heterogeneous establishments

relationship. All subsequent studies confirmed it (see for example King and Levine, 1993, and the review in: Pagano, 1993). Goldsmith used a sample of 35 countries for the period between 1860 and 1963 to show the relationship between income and financial depth measured by the ratio between bank's assets and GDP. He also showed that in periods of rapid growth, financial depth grows faster than income. More details about measuring financial depth can be found in this paper. FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH Velimir Šonje

/pdf/financial-development-and-economic-growth-1933kuo17q.pdf

Financial development and economic growth

Explaining levels of economic development hinges on explaining TFP dierences across coun- tries. In poor countries, total factor productivity (TFP) is particularly low in sectors producing tradable goods. We document that an important dierence between tradable and non-tradable sectors is their average establishment size: Tradable establishments operate at much larger scales. We develop a model co-determining aggregate TFP, sectoral TFP, and scales across industrial sectors. In our model, …nancial frictions disproportionately aect TFP in tradable sectors where production requires larger …xed costs. Our quantitative exercises show that …- nancial frictions explain a substantial part of the observed cross-country relationship between aggregate TFP, sectoral TFP, and output per worker.

/pdf/finance-and-development-a-tale-of-two-sectors-3e9cu3ezir.pdf

Finance and Development: A Tale of Two Sectors †

We use producer-level data to evaluate the role of financial frictions in determining total factor productivity (TFP). We study a model of establishment dynamics in which financial frictions reduce TFP through two channels. First, finance frictions distort entry and technology adoption decisions. Second, finance frictions generate dispersion in the returns to capital across existing producers and thus productivity losses from misallocation. Parameterizations of our model consistent with the data imply fairly small losses from misallocation, but potentially sizable losses from inefficiently low levels of entry and technology adoption. (JEL E32, E44, F41, G32, L60, O33, O47)

/pdf/finance-and-misallocation-evidence-from-plant-level-data-ltsh4hed8n.pdf

Finance and Misallocation: Evidence from Plant-Level Data

The authors use a simple model to study the optimal design of unemployment insurance and employment protection. Workers are risk averse and face the possibility of unemployment. Firms are risk neutral and face random shocks to productivity. Workers can participate in a shadow economy, or informal sector. The model yields several lessons. First, countries should encourage formal employment to address the issue of informal employment. In extreme cases, such encouragement translates into high severance payments and negative payroll taxes. Along these same lines, unemployment payments cannot be too large. In fact, when the risk of informality is extreme, the authors find that unemployment benefits should be negative, which is (in effect) a positive tax on the lack of formal employment.

How Does Informal Employment Affect the Design of Unemployment Insurance and Employment Protection

This paper documents and interprets two facts central to the dynamics of informal default or “delinquency” on unsecured consumer debt. First, delinquency does not mean a persistent cessation of payment. In particular, we observe that for individuals 60 to 90 days late on payments, 85% make payments during the next quarter that allow them to avoid entering more severe delinquency. Second, many in delinquency (40%) have smaller debt obligations one quarter later. To understand these facts, we develop a theoretically and institutionally plausible model of debt delinquency and bankruptcy. Our model reproduces the dynamics of delinquency and suggests an interpretation of the data in which lenders frequently (in roughly 40% of cases) reset the terms for delinquent borrowers, typically involving partial debt forgiveness, rather than a blanket imposition of the “penalty rates” most unsecured credit contracts specify.

Bankruptcy and Delinquency in a Model of Unsecured Debt

El objetivo de este trabajo es mostrar que, bajo ciertas condiciones, la influencia del seguro de desempleo [UB] sobre la eficiencia en la asignacion del trabajo depende crucialmente del modo en que tales prestaciones afectan a la busqueda de empleo. El proceso de busqueda por parte de un desempleado se ve influenciado por el seguro de paro a traves de dos vias: reduciendo la intensidad de busqueda e incrementando el salario de reserva. Mientras a traves de la primera via se reduce el valor descontado de la produccion futura del desempleado, la ultima ejerce un efecto ambiguo sobre tal valor. Para separar empiricamente ambos efectos, en el trabajo se estima un modelo probit bivariatne con observabilidad parcial utilizando datos individuales.

Job search: Intensity and reservation wage in the Spanish labour market

We first study growth and risk sharing in a stochastic growth model with preference shocks and two risk-averse agents. In periods in which one of the agents needs extra consumption (insurance), it is socially optimal to reduce the consumption of the other agent (redistribution) and also to accumulate fewer resources for the future (disinvestment). The latter hurts growth while the former only affects the distribution of aggregate consumption. Then, to analyze if information matters, we study if the same allocation would be implementable under private information. We find that it depends on the state of the economy. The provision of insurance that is implemented by reducing capital accumulation deteriorates the prospects of all agents in the economy and thus helps to alleviate informational frictions. The size of redistribution versus disinvestment and the outlook of economic growth at the time of disinvestment affects the possibilities of implementing the best possible allocation when the preference shock is private information. Therefore, we conjecture that under private information the best allocation compatible with incentives would tend to hurt growth and to concentrate resources in agents with private information in order to provide incentives to report the shock truthfully.

Risk sharing, investment, and incentives in the neoclassical growth model

argument in favor of the Tax Cuts and Jobs Act of 2017. Barro and Furman (2018) predicted that the act would boost gross domestic product (GDP) by 1.1 percentage points per year in 2018 and in 20192 but that most of the boost will disappear quickly, decreasing to only 0.2 percentage points annually after 10 years. In this essay, I argue that data on innovation and activities funded by venture-capital (VC) show the permanent impact of tax cuts on growth—given that the tax cuts remain. Most of the analysis will draw from my recent working paper “Financing Ventures: Some Macro economics,” written with Jeremy Greenwood and Pengfei Han.3

/pdf/tax-cuts-venture-capital-and-long-term-growth-9zq757ogt3.pdf

Juan M. Sánchez

Papers

How Does Informal Employment Affect the Design of Unemployment Insurance and Employment Protection

Bankruptcy and Delinquency in a Model of Unsecured Debt

Job search: Intensity and reservation wage in the Spanish labour market

Risk sharing, investment, and incentives in the neoclassical growth model

Tax Cuts, Venture Capital, and Long-Term Growth