Self-enforcing contracts with persistence

• 成果类型: Article
• 署名作者: Dumav, Martin; Fuchs, William; Lee, Jangwoo
• 署名单位: Universidad Carlos III de Madrid; University of Texas System; University of Texas Austin; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2022.03.010
• 发表日期: 2022
• 页码: 72-87
• 关键词: Dynamic moral hazard; PRODUCTIVITY; RELATIONAL CONTRACTS; persistence; limited commitment

摘要

We show theoretically that, in the presence of persistent productivity shocks, the reliance on self-enforcing contracts due to limited legal enforcement may provide a possible rationale why countries with the worse rule of law might exhibit: (i) higher aggregate TFP volatilities, (ii) larger dispersion of firm-level productivity, and (iii) greater wage inequality. We also provide suggestive empirical evidence consistent with the model's aggregate implications. Finally, we relate the model's firm-level implications to existing empirical findings. (C) 2022 The Authors. Published by Elsevier B.V.