1 We thank the exceptional research assistance of Deirdre Daly. We have bene…tted from the comments of Chang-Tai Hsieh, discussions with Fernando Alvarez and Lars Hansen, and feedback from participants in seminars at the University of British Columbia, Queen's University, and the Federal Reserve Bank of Chicago. Eaton and Kortum gratefully acknowledge the… (More)
We examine the impact of a large number of Japanese government-sponsored research consortia on the research productivity of participating firms by measuring their patenting in the targeted technologies before, during, and after participation. Consistent with the predictions of the theoretical literature on research consortia, we find consortium outcomes are… (More)
This paper argues that there are two distinct components in an optimal policy for the unemployed: insuring workers against uncertainty in the prospect of finding a job; and providing workers with the liquidity to smooth consumption while unemployed. In contrast to the leading papers on the optimal contracting approach to unemployment insurance 1Steven… (More)
This paper argues that openness to new, unconventional and disruptive ideas has a …rst-order impact on creative innovations— innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of di¤erent ages and human capital are sorted… (More)
We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the e¤ects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop… (More)
Customs data and …rm-level production data reveal both the heterogeneity and the granularity of individual buyers, and sellers. We seek to capture these …rm-level features in a general equilibrium model that is also consistent with observations at the aggregate level. Our model is one of product trade through random meetings. Buyers, who may be households… (More)
Applying a centuries-old technique to modern cost estimation.