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- Publications
- Influence
Why Has CEO Pay Increased so Much?
- X. Gabaix, A. Landier
- Business, Economics
- 1 July 2006
This paper develops a simple equilibrium model of CEO pay. CEOs have different talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO’s pay changes one for… Expand
Zipf's Law for Cities: An Explanation
- X. Gabaix
- Economics
- 1 August 1999
Zipf ’s law is a very tight constraint on the class of admissible models of local growth. It says that for most countries the size distribution of cities strikingly fits a power law: the number of… Expand
The Granular Origins of Aggregate Fluctuations
- X. Gabaix
- Economics
- 1 August 2009
This paper proposes that idiosyncratic firm-level fluctuations can explain an important part of aggregate shocks, and provide a microfoundation for aggregate productivity shocks. Existing research… Expand
Variable Rare Disasters: An Exactly Solved Framework for Ten Puzzles in Macro-Finance
- X. Gabaix
- Economics
- 1 January 2008
This paper incorporates a time-varying intensity of disasters in the Rietz-Barro hypothesis that risk premia result from the possibility of rare, large disasters. During a disaster, an asset’s… Expand
Power Laws in Economics and Finance
- X. Gabaix
- Economics
- 1 September 2008
A power law is the form taken by a large number of surprising empirical regularities in economics and finance. This article surveys well-documented empirical power laws concerning income and wealth,… Expand
Rank − 1 / 2: A Simple Way to Improve the OLS Estimation of Tail Exponents
- X. Gabaix, R. Ibragimov
- Mathematics
- 1 September 2007
Despite the availability of more sophisticated methods, a popular way to estimate a Pareto exponent is still to run an OLS regression: log(Rank) = a − b log(Size), and take b as an estimate of the… Expand
The Granular Origins of Aggregate Fluctuations
- X. Gabaix
- Economics
- 17 August 2009
This paper proposes that idiosyncratic firm-level fluctuations can explain an important part of aggregate shocks, and provide a microfoundation for aggregate productivity shocks. Existing research… Expand
Power Laws in Economics and Finance
- X. Gabaix
- Economics
- 2 September 2009
A power law (PL) is the form taken by a large number of surprising empirical regularities in economics and finance. This review surveys well-documented empirical PLs regarding income and wealth, the… Expand
A Multiplicative Model of Optimal CEO Incentives in Market Equilibrium
- Alex Edmans, X. Gabaix, A. Landier
- Economics
- 1 December 2009
This paper presents a unified theory of both the level and sensitivity of pay in competitive market equilibrium, by embedding a moral hazard problem into a talent assignment model. By considering… Expand
A Sparsity-Based Model of Bounded Rationality
- X. Gabaix
- Economics
- 1 March 2011
This paper defines and analyzes a "sparse max" operator, which is a less than fully attentive and rational version of the traditional max operator. The agent builds (as economists do) a simplified… Expand