Journal articles
- COVID-19 Vaccination Mandates and
Vaccine Uptake, Nature Human Behaviour
6, p.1615-1624, 2022 (with D. Kim, S. Lu and H. Shigeoka) [PDF]
NBER Working Paper No. 29563 and IZA Working Paper No. 14946
Policy and media: CDC, Nature, The Economist, Euronews, National Post, Financial Post, Toronto Star, EPI, ACSH, News Medical, Scienmag, Medicalxpress, U of Tokyo, SFU News
Keywords: COVID-19, vaccine mandates, vaccine certificates, vaccine uptake, vaccine hesitancy, proof of vaccination, difference-in-differences, time series, counterfactuals - Transaction Fee Economics in
the Ethereum Blockchain, Economic
Inquiry 60, p.265-292, 2022 (with A. Donmez)
[PDF]
Keywords: blockchain, transaction fees, Ethereum, time series, queueing theory - Involuntary
Entrepreneurship - Evidence from Thai Urban
Data, World Development 149:
105706, 2021 (with T. Yindok) [PDF]
Keywords: entrepreneurship, credit constraints, occupational choice, misallocation - Face Masks, Public Policies
and Slowing the Spread of COVID-19: Evidence
from Canada, Journal of Health
Economics 78, 2021 (with S. Lu, H.
Shigeoka, C. Chen and S. Pamplona) [PDF]
NBER Working Paper No. 27891
Policy and media: WHO, WHO(2), CDC, Government of Canada, ECDC, Nature, National Post, Vancouver Sun, Ottawa Citizen, New York Post, MSN, Yahoo!, The Telegraph, Daily Mail, VoxEU, SFU News
Keywords: COVID-19, face masks, mask wearing, non-pharmaceutical interventions (NPI), event study, counterfactuals - A Social Network Model of
COVID-19, PLOS ONE 15(10):
e0240878, 2020 [PDF]
Keywords: COVID-19, social networks, superspreaders, simulations, policy interventions, NPI - Credit Lines in
Microcredit: Short-Term Evidence from a
Randomized Controlled Trial in India,
Journal of Development Economics 146,
2020 (with F. Aragon and K. Krishnaswamy) [PDF]
Keywords: microfinance, credit line, flexible loans, field experiment, RCT - Bogus Joint Liability
Groups in Microfinance, European
Economic Review 122: 103353, 2020
(with Y. Xue and X. Xing) [PDF]
Keywords: microcredit, default, joint liability, Lei Da Hu, phantom borrowers - Family Firms, Bank
Relationships and Financial Constraints: A
Comprehensive Score Card, International
Economic Review 60(2), p.547-593, 2019
(with J. Saurina and R. Townsend) [PDF]
Keywords: family firms, firm networks, investment cashflow sensitivity, financial constraints - Markov-perfect Risk
Sharing, Moral Hazard and Limited
Commitment, Journal of Economic
Dynamics and Control 94, p.1-23, 2018
(with F. Martin) [PDF]
Keywords: Markov-perfect equilibrium, time consistency, insurance, risk sharing - (Dis)Advantages of
Informal Loans - Theory and Evidence,
European Economic Review 102,
p.100-128, 2018 (with A. Kessler) [PDF]
Keywords: informal credit, family loans, social capital, limited enforcement, default risk - Non-grant Microfinance,
Incentives and Efficiency,
Applied Economics 50, p.2509-24, 2018
[PDF]
Keywords: microcredit, for-profits, MFI funding - Market Power and Asset
Contractibility in Dynamic Insurance
Contracts, Federal Reserve Bank of
St. Louis Review 98(2), p.111-27, 2016
(with F. Martin) [PDF]
Keywords: Markov-perfect equilibrium, time consistency, market structure, risk sharing - Dynamic Optimal Insurance
and Lack of Commitment, Review of
Economic Dynamics 18(2), p.287-305,
2015 (with F. Martin) [PDF]
Keywords: Markov-perfect equilibrium, time consistency, limited commitment, risk sharing - Dynamic Financial
Constraints: Distinguishing Mechanism
Design from Exogenously Incomplete
Regimes, Econometrica 82(3),
p.887-959, 2014 (with R. Townsend) [PDF] [Supplement]
* NBER Working Paper No. 19617, November 2013
Keywords: consumption smoothing, investment, model selection, structural maximum likelihood, moral hazard, limited commmitment - Contractual Structure in
Agriculture with Endogenous Matching,
Journal of Development Economics 110,
Special Issue: Land and Property Rights,
p.239-49, 2014 (with M. Ghatak) [PDF]
Keywords: tenancy contracts, sharecropping, matching, double-sided moral hazard - Financial Constraints and
Occupational Choice in Thai Villages,
Journal of Development Economics
97(2), p.201-220, 2012 [PDF]
Keywords: entrepreneurship, financial constraints, maximum likelihood, lotteries, moral hazard, saving, borrowing - Learning by Doing vs.
Learning from Others in a Principal-Agent
Model, Journal of Economic
Dynamics and Control 34(10),
p.1967-1992, 2010 (with J. Arifovic) [PDF]
Keywords: social learning, individual learning, evolutionary learning, reinforcement learning, share contract, moral hazard - Heterogeneity, Returns to
Scale, and Collective Action, Canadian
Journal of Economics 42(2), p.771-807,
2009 [PDF]
Keywords: public goods, wealth inequality, valuation heterogeneity, expected provision, replacement function - Understanding Optimal
Criminal Networks, Global Crime
10(1), p.41-65, 2009 (with S. Easton) [PDF]
Keywords: network theory, organized crime, law enforcement - Wealth Inequality and
Collective Action, Journal of
Public Economics 91(9), Special
Issue: Celebrating the 20th Anniversary of
Bergstrom, Blume, and Varian's “On the
Private Provision of Public Goods",
p.1843-1874, 2007 (with P. Bardhan and M.
Ghatak) [PDF]
Keywords: public goods, inequality, within-group inequality, between-group inequality - Can a Raise in Your Wage
Make You Worse Off? A Public Goods
Perspective, Journal of
Development Economics 84(1),
p.551-571, 2007 (with S. Ghosh) [PDF]
Keywords: public goods, externalities, opportunity cost of time - A Case for Bundling
Public Goods, Journal of Public
Economic Theory 9(3), p.425-451, 2007
(with S. Ghosh and M. Oak) [PDF]
Keywords: voluntary contributions, pooling, fundraising, income inequality - Distinguishing Limited
Liability From Moral Hazard in a Model of
Entrepreneurship, Journal of
Political Economy 144(1), p.100-144,
2006 (with A. Paulson and R. Townsend) [PDF] [Matlab code]
Keywords: occupational choice, financial constraints, limited commitment, maximum likelihood, Vuong test - Pareto Improving
Lotteries and Voluntary Public Good
Provision, The B.E. Journal of
Theoretical Economics (Topics) 6(1),
p.1-13, 2006 [PDF]
Keywords: randomization, inequality, collective action - Social Learning in a Model of Adverse Selection, ch.12 in D. West, G. Dow and A. Eckert (eds.), Industrial Organization, Trade, and Social Interaction, University of Toronto Press, 2010 (with J. Arifovic) [PDF]
- Inequality and Collective Action, ch.3 in P. Bardhan, S. Bowles and J-M. Baland (eds.), Inequality, Cooperation and Environmental Sustainability, Princeton University Press, 2006 (with P. Bardhan and M. Ghatak) [PDF]
- Face mask mandates slowed the spread of COVID-19 in Canada, VoxEU, 2020 (with S. Lu and H. Shigeoka)
- Criminal Organizations and Networks, in Robert D. Morgan (ed.) The SAGE Encyclopedia of Criminal Psychology, SAGE Publications Inc., 2019 (with S. Easton)
- The Impact of a Micro-Overdraft Facility in India, Financial Access Initiative, 2016 (with K. Krishnaswamy)
- Understanding Optimal Criminal Networks, ch. 4 in M. Bouchard and C. Wilkins (eds.) Illegal Markets and the Economics of Organized Crime, Routledge, 2010 (with S. Easton)
- Distinguishing Limited Liability from Moral Hazard in a Model of Entrepreneurship, ch. 5 in T. Beck (ed.) Entrepreneurship in Developing Countries, Edward Elgar Publishing, 2009 (with A. Paulson and R. Townsend)
Refereed book chapters
Working papers and research in progress
Digital Safety Nets: A Roadmap (with B. Mojon, L. Pereira da Silva and R. Townsend), BIS Papers #139, 2023
We show how new digital technologies can be used to improve safety nets for insurance against idiosyncratic and aggregate income risks, tailored to deal specifically with well-known obstacles to trade: limited commitment, moral hazard, unobserved states and payment transaction costs. We illustrate the gains from incentive-compatible voluntary risk-sharing schemes for groups of economic agents, eg Thai households and Spanish firms. We assess the currently best-fitting financial regime within each group and quantify large welfare gains from improved insurance despite the obstacles to trade. Our methods could be applied in various contexts to foster financial inclusion and complement existing broader safety net mechanisms in a cost-effective way. We provide blueprints for design and implementation.
I analyze the mapping between fundamental elements of financial contracts and transactions -- property rights, enforcement, commitment, information -- and the algorithmic tools and constraints of digital technologies such as blockchain platforms and automated (`smart') contracts. I then describe and formalize the microeconomic foundations, algorithmic building blocks, and possible uses of blockchain digital platforms for implementing constrained-optimal multiperiod contracts in incomplete markets settings with information or enforcement frictions and as collateral mechanism supporting on-platform and off-platform transactions and payments. Specific economic applications are provided and analyzed.
Incentive-Compatible Unemployment Reinsurance for the Euro Area (with B. Mojon, L. Pereira da Silva, A. Tejada and R. Townsend), 2024
We model a reinsurance mechanism for the national unemployment insurance programs of euro area member states. The proposed risk-sharing scheme is designed to smooth country-level unemployment risk and expenditures around each country's median level, so that participation and contributions remain incentive-compatible at all times and there are no redistributionary transfers across countries. We show that, relative to the status quo, such scheme would have provided nearly perfect insurance of the euro area member states' unemployment expenditures risk in the aftermath of the 2009 sovereign debt crisis if allowed to borrow up to 2 percent of the euro area GDP. Limiting, or not allowing borrowing by the scheme, would have still provided significant smoothing of surpluses or deficits in the national unemployment insurance programs over the period 2000-2019.
Economic determinants of Ethereum transaction fees in the priority fee and proof of stake periods (with S. Zarifian), in progress
We analyze the economic determinants and dynamics of transaction fees in the Ethereum blockchain before and after two pivotal platform updates. The first is the August 2021 `London upgrade', a switch from user-bid \textit{gas price} (transaction fee per unit of complexity) to a new fee model in which the gas price is the sum of an algorithmically determined ``base fee'' and an optional ``priority fee'' akin to a tip. The second update (`the Merge') is the shift from ``proof of work'' to ``proof of stake'' transaction validation protocol in September 2022. We estimate the impact on the gas price of both demand factors (block utilization, transaction type, the ETH price in USD) and algorithmic supply-side factors (the block gas limit and base fee). Using data from nearly 900 mln transactions, we find that the gas price is significantly positively associated with the block utilization rate. A larger share of contract call transactions is linked with higher gas prices on average. Another significant factor in the post-London period is the share of legacy (user-bid gas price) transactions, whose users pay higher gas prices on average. On the supply side, a higher block gas limit is statistically significantly associated with lower gas prices.
Distinguishing Across Models of International Capital Flows (with M. Wright)
We formulate and solve a range of dynamic models of international capital flows and risk sharing with imperfect capital markets. We feature both models of exogenously incomplete markets (debt with tax on borrowing or on capital outflows, non-defaultable debt) and models with endogenously incomplete markets (defaultable debt, limited commitment), as well as the complete markets benchmark. All models share common preferences and technology. We use computational methods based on mechanism design, linear programming, and maximum likelihood to estimate and statistically test across the alternative models of international capital markets. Our methods work with cross-sectional or panel data and allow for measurement error and unobserved heterogeneity. We study which models fit best and also what type of data (income, investment, capital, consumption, or all together) can be used to distinguish across the alternative models. Empirically, we use panel data on GDP, government expenditure, consumption, capital stock and investment per capita for 175 countries in 1993-2002. We find that, overall, the defaultable debt and autarky models fit the data best. The complete markets and limited commitment models are rejected in all estimation runs.
Economics of Crime Networks (with R. Dastranj and S. Easton)
We study a network-based model of criminal activity. Agents' payoffs depend on the number and structure of links among them and are determined in a Nash equilibrium of a crime effort supply game. Unlike much of the existing literature that takes network structure as given, we analyze optimal network structures, defined as maximizing aggregate payoff. Using potential functions, we give necessary and sufficient conditions that guarantee the existence and uniqueness of equilibria with non-negativity constraints on effort. These results can be used to identify optimal networks for given cost and benefit parameter configurations drawing on graph theory and using a computational algorithm that searches over all possible non-isomorphic networks of a given size. Our results can be also used to study, via numerical simulations, the effects of alternative crime reducing policies on the network structure and crime level - removing agents, removing links or varying the probability of apprehension.
Social Insurance and Status (with B. Xia), 2012
Development Dynamics with Credit Rationing and Occupational Choice, 2005
The paper presents a stylized general equilibrium model of a developing economy in which the wealth distribution, the interest rate, and the wage rate are endogenous and interact dynamically. A credit market imperfection stemming from limited commitment results in allocative inefficiency due to credit rationing and occupational choice constraints. Credit rationing is shown to persist as the economy develops. The proposed model is shown to match both general empirical regularities pertaining to developing economies and macroeconomic data from Thailand. Furthermore, wealth inequality in this setting may be detrimental for economic development, providing a rationale for redistribution policies.
This paper provides a step-by-step hands-on introduction to the techniques used in setting up and solving moral hazard programs with lotteries using Matlab. It uses a linear programming approach due to its relative simplicity and the high reliability of the available optimization algorithms.
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