Date of Award

Spring 5-15-2018

Author's School

Graduate School of Arts and Sciences

Author's Department


Degree Name

Doctor of Philosophy (PhD)

Degree Type



Essays on Incomplete Markets and Macroeconomics consists of contributions of theoretical and empirical nature in the sub-field of Macroeconomics through two chapters.

In the first chapter, titled Liquidity Regulation in a Monetary Economy, although it is commonly argued that the prevention of bank runs is the main reason to regulate banks’ asset portfolios, I show that a market failure that justifies such regulation lies on the incompleteness

of financial markets when there is risk about the aggregate distribution of transaction types. I develop a framework in which outside (fiat, government-provided) and inside (plastic, bank-created) money co-exist as means of payment under either complete or incomplete

financial markets for aggregate risk. The welfare analysis is reduced to comparing only two parameters: the currency-to-liability ratio C which is set by the government and the fraction D of banks’ depositors engaged in cash-only transactions (inside money cannot be accepted). In equilibrium, when C

In the second chapter, titled Estimating Factor Shares from Nonstationary Panel Data and co-authored with Nelson R. Ramírez-Rondan, it is acknowledged that the measurement of the sources of economic growth is essential for understanding the long-term perspective of

any economy. From an empirical viewpoint, the results from any growth-accounting exercise depend both on the functional form that summarizes the technology set and the factor share values. We estimate the physical capital’s share in output implied by a Cobb-Douglas production function. Instead of growth rates, we analyze time series in levels to preserve the long-run information contained in the data. We also make use of the cross-section dimension (between countries) to overcome the low availability of long time series. The Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) estimators are used in a panel cointegration framework for 109 countries over the 1951-2014 period. For several measures of labor input, our physical capital’s share estimates range between 0.46 and 0.56 for the largest set of countries. Our estimates of the physical capital’s share in output vary significantly across regions.


English (en)

Chair and Committee

Gaetano Antinolfi, Costas Azariadis

Committee Members

Michele Boldrin, Fernando M. Martin, Robert Parks,


Permanent URL:

Available for download on Sunday, May 15, 2118

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Economics Commons