VGSF - WU Vienna - LC

William Fuchs, University of Texas at Austin McCombs School of Business

online via Zoom 11:00 - 12:15

Organizer VGSF

As part of the ser­ies of the "Fin­ance Re­search Sem­inar", VGSF wel­comes Wil­liam Fuchs from Uni­versity of Texas at Austin Mc­Combs School of Busi­ness to present his re­search pa­per.
Per­sonal Webpage

Pa­per

Self-en­for­cing Con­tracts with Per­sist­ence

The use of self-en­for­cing con­tracts in an en­vir­on­ment with per­sist­ent shocks ra­tion­al­izes why coun­tries with lim­ited legal en­force­ment ex­hibit: (i) higher ag­greg­ate TFP / GDP volat­il­it­ies, (ii) lar­ger dis­per­sion of firm­-­level pro­ductiv­ity, and (iii) greater wage inequal­ity. We also provide sug­gest­ive evid­ence con­sist­ent with the model’s pre­dic­tions. Fi­nally, we re­late the model’s firm­-­level im­plic­a­tions to ex­ist­ing em­pir­ical find­ings.



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