Abstract

This dissertation consists of two independent chapters in the field of Macroeconomics. The first article studies the implications of complementarity on productivity under financial frictions. Does improving the access to financing lead to more productive firms? We develop a model of heterogeneous producers facing collateral constraints and a technology adoption decision. Producers' choices are connected through the final good market, creating complementarity in adoption. We find that more complementarity between producers amplifies the effects of financial frictions through more sensitive adoption. In a high-complementarity economy, adopters increase up to 219% relative to the self-financing economy. Misallocation is the main driver of TFP loss only when complementarity is low. Our results imply that economies with high complementarity benefit more from financial liberalizations, incentivizing the adoption of more productive technologies. The second chapter uses a wedge accounting framework to study structural transformation and the joint evolution of production and consumption across sectors. We map observable data into distortions affecting labor allocation, productivity, demand, and intertemporal decisions. Using internationally comparable data for a large panel of countries from 1950 to 2010, we document systematic patterns across stages of development. Low-income countries exhibit large distortions in agriculture that sustain high employment in low-productivity sectors, while distortions decline with income and resources reallocate toward manufacturing and services. Incorporating non-homothetic preferences and investment improves the measurement of demand distortions but does not eliminate them. The results highlight the central role of distortions in shaping structural transformation.

Committee Chair

Francisco Buera

Committee Members

Julian Kozlowski; Philipp Gruebener; Rody Manuelli; Yongseok Shin

Degree

Doctor of Philosophy (PhD)

Author's Department

Economics

Author's School

Graduate School of Arts and Sciences

Document Type

Dissertation

Date of Award

7-29-2026

Language

English (en)

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Economics Commons

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