Abstract：Exploiting variation across Swedish local labor markets between 1986 and 2018, I estimate that individuals are less likely to start new firms and switch employers in an older labor market. To account for these patterns, I propose an equilibrium theory of growth with frictional labor markets. On the one hand, workforce aging raises the level of output by increasing the share of people who have found a good match with existing production technologies. On the other hand, the higher opportunity cost of switching to new technologies discourages their introduction. The offsetting level and growth effects result in high growth through the 1990s, even though the rate at which new technologies are introduced declines monotonically since the 1970s. I estimate that it will be suppressed for the next 30 years. The lower growth rate in the older economy lowers welfare for labor market entrants, but raises the value of the high-productive jobs typically held by older individuals.

Abstract：Using household survey data for the U.S. and Australia, we quantify the role of taxes and transfers in providing consumption insurance against income risk. While the two countries differ substantially in their degree of tax and transfer progressivity and the extent to which it reduces the variability of disposable income, we find using a semi-structural model of income, net taxes, and consumption that the overall role of taxes and transfers in affecting the elasticity of consumption with respect to permanent income shocks is similar, with an estimated 5.4 percentage point reduction for the U.S. versus 4.8 for Australia. We interpret this result using a stylized life-cycle model with incomplete markets. Counterfactual analysis for a calibrated version of the structural model shows that, while higher progressivity increases the role of taxes in providing consumption insurance, these effects are partially mitigated by less self-insurance given higher marginal tax rates. The level of wealth relative to income also reduces the effects of progressivity on consumption insurance. Thus, higher wealth-to-income ratios in Australia can explain why, despite higher progressivity, the impact of taxes and transfers on consumption insurance is similar to the U.S.

Abstract：We study structural change in production networks for intermediate inputs (input-output network) and new capital (investment network). For each network, we document that the share of output produced by goods sectors has declined since the 1950s, offset by a rising fraction of production by services sectors. We develop a multi-sector growth model to study these trends and show that our framework admits an aggregate balanced growth path with such structural change. Calibrating the model using disaggregated expenditure-side price data for the United States, we find that inputs to intermediates production are complements. However, in contrast to existing literature, we find that inputs to investment production are substitutes. Hence, structural change in production networks implies that resources endogenously reallocate to the slowest growing intermediates producers and the fastest growing investment producers. As a result, we show that investment-specific technical change accounts for an increasing share of U.S. aggregate growth, rising from 30-40% of growth prior to the 1980s to more than 70% since the year 2000. In addition, more than 20% of aggregate growth after 2000 stems from endogenous reallocation induced by structural change. At the same time, productivity growth within the input-output network has stagnated, accounting for the bulk of the recent slowdown in aggregate growth.

Abstract：Output dynamics and private sector access vary across sovereign debt restructurings with foreign private creditors. We compile data on sovereigns’ private sector borrowing from sovereign’ foreign creditor chair countries in 1977–2020. We find that (i) sovereigns with high private sector borrowing from sovereigns’ creditor chair countries choose a preemptive restructuring; (ii) private sector borrowing from sovereigns’ creditor chair countries declines mildly in preemptive restructurings while sharply in post-default restructurings. We build sovereign debt model with endogenous choice of preemptive and post-default renegotiations, output dynamics and private sector access. Our model quantitatively shows that the sovereign’s choice of preemptive or post-default restructuring affects differently the foreign creditor’s net worth and lending to the sovereign’s private sector, and, in turn, this results in different output dynamics. Data support theoretical predictions.