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We consider a general representation of the delegation problem, with and without money burning, and provide sufficient and necessary conditions under which an interval allocation is optimal. We also provide a partial characterization for cases were money burning is optimal. We apply our results to the theory of trade agreements among privately informed(More)
We study the effect of releasing public information about productivity or monetary shocks (for example, as a consequence of publishing an economic aggregate) using a micro-founded macroeconomic model where agents learn from the distribution of nominal prices. While a public release has the direct beneficial effect of providing new information , it can also(More)
This paper provides evidence of a causal and economically important effect of financial development on volatility. In contrast to the existing literature, the identification strategy is based on the differences in sensitivities to financial conditions across industries. The results show that sectors with larger liquidity needs are more volatile and(More)
I propose an implementation of the q-theory of investment using bond prices instead of equity prices. Credit risk makes corporate bond prices sensitive to future asset values, and q can be inferred from bond prices. The bond market's q performs much better than the usual measure in standard investment equations. With aggregate data, the fit is three times(More)
Previous studies on the influence of weather on Aedes aegypti dynamics in Puerto Rico suggested that rainfall was a significant driver of immature mosquito populations and dengue incidence, but mostly in the drier areas of the island. We conducted a longitudinal study of Ae. aegypti in two neighborhoods of the metropolitan area of San Juan city, Puerto Rico(More)
We investigated the effects of environmental factors and immature density on the productivity of Aedes aegypti (L.) and explored the hypothesis that immature populations were under nutritional stress. In total, 1,367 containers with water in 624 premises were studied in Salinas, southern Puerto Rico (May-July 2004). We counted 3,632 pupae, and most female(More)
In this paper, we propose a tractable variant of the open economy neoclassical growth model that emphasizes political economy and contracting frictions. The political economy frictions involve disagreement and political turnover, while the contracting friction is a lack of commitment regarding foreign debt and expropriation. We show that the political(More)
Philip Lane for sharing with us their crosscountry data on foreign asset positions. Abstract Large and persistent global financial imbalances need not be the harbinger of a world financial crash. Instead, we show that these imbalances can be the outcome of financial integration when countries differ in financial markets deepness. In particular, countries(More)
Aedes aegypti and Culex quinquefasciatus were found in large numbers emerging from septic tanks in southern Puerto Rico during the dry season. Previous studies suggested that Ae. aegypti uses subterranean aquatic habitats only during dry periods when surface containers do not have water. This research investigated whether septic tanks are alternative(More)
We study the diffusion of dispersed private information in a large economy. We assume that agents learn from the actions of others through both a private channel, which represents learning from local interactions, and a public channel, which represents learning from prices. We show that the private and public channels of information diffusion generate(More)