This article reviews the economic literature on informality, its causes, and its consequences
for development. It covers a comprehensive body of research that ranges from well-identified …

Why do living standards differ so much across countries? A consensus in the development
literature is that differences in productivity are a dominant source of these differences. But …

We study the welfare costs of markups in a dynamic model with heterogeneous firms and
endogenous markups. We provide aggregation results summarizing the macro implications …

We quantify the amount of spatial misallocation of labor across US cities and its aggregate
costs. Misallocation arises because high productivity cities like New York and the San …

This paper offers a unified explanation for the slowdown of productivity growth, the decline in
business dynamism, and the rise of market power. Using a quantitative framework, I show …

This study provides a new theoretical result that a decline in the long‐term interest rate can
trigger a stronger investment response by market leaders relative to market followers …

We build a model of firm-level innovation, productivity growth, and reallocation featuring
endogenous entry and exit. A new and central economic force is the selection between high …

This paper examines how prices, markups, and marginal costs respond to trade
liberalization. We develop a framework to estimate markups from production data with multi …

Large exporters are simultaneously large importers. We show that this pattern is key to
understanding low aggregate exchange rate pass-through as well as the variation in pass …

We develop a methodology to disentangle sources of capital “mis-allocation,” ie, dispersion
in value-added/capital. It measures the contributions of technological/informational frictions …