Research
Working Papers
Entrepreneurs, Sudden Stops, and Inequality [Link] (Revised draft coming soon)
Abstract: This paper quantifies the importance of heterogeneity across entrepreneurs in accounting for aggregate and distributional dynamics during sudden stops. Using Argentinian household survey data from 1996 and 2003, I establish that the income distribution of entrepreneurs widened relative to that of workers. Motivated by this, I develop a small open-economy, heterogeneous-agent model with occupational choice in which households endogenously select into being a worker, a self-employed entrepreneur, and an employer entrepreneur. The model rationalizes aggregate and distributional features of sudden stops that standard models cannot. The model shows that a tax on assets and capital reduces the probability of a sudden stop, reduces long-run welfare, and dampens the relative widening of the income distributions by disincentivizing entrepreneurship.Did Durable Goods Producing States Suffer a Greater Great Depression? (with Dong Cheng and Mario Crucini)