We propose a theory of trade in which comparative advantages reveal themselves gradually over the path of development. Following the Ricardian tradition, countries specialise and export the set of goods they are able to produce at relatively lower cost given their exogenous initial endowments....

We provide evidence showing that the degree of diversification of import sources of finely disaggregated commodities rises monotonically along the growth path. This result is robust to different measures of import diversification and the inclusion of a large set of additional control variables....

The recent financial crisis, alongside a dramatic rise in unemployment on both sides of the Atlantic, suggests that financial shocks do translate into the labour markets. In this paper we first present and review the basic facts on unemployment dynamics, financial shocks and Okun's elasticity...

A large body of empirical literature indicates that, contrary to predictions from economic theory, wages in the informal sector increase after a minimum wage hike. This phenomenon was so far explained as a byproduct of a signal (a lighthouse) conveyed by statutory minima to wage setting in the...

This paper studies the link between migration, remittances and productive assets accumulation for a panel of poor rural households in Mexico over the period 1997-2006. In a context of financial markets imperfections, migration may act as a substitute for imperfect credit and insurance provision...

We propose an occupational choice model in which the quality of the state bureaucracy influences aggregate output and the level of entrepreneurial activity through its participation in the labour market. Skilled agents differ in terms of their public service motivation: if agents with low public...

The existing literature ignores the fact that in most European countries the strictness of Employment Protection Legislation (EPL) varies across the firm size distribution. In Italy firms are obliged to rehire an unfairly dismissed worker only if they employ more than 15 employees....

Labor market reforms increasing flexibility at the margin have been recently paying out in terms of employment growth. This paper argues that two-tier labor market reforms have a transitional honeymoon, job creating effect. In a dynamic model of labor demand under uncertainty, the paper predicts...

This paper presents a theory in which risk-averse heterogeneously talented entrepreneurs are the key agents driving the process of development and modernisation. Entrepreneurial skills are private information, which prevents full risk sharing. In that setup, development to a modern industrial...