This paper uses a Lagrangian approach to provide sufficient conditions under which money burning expenditures are used in an optimal delegation contract. For comparison, we also establish simple sufficient conditions for the optimality of a cap allocation under a restricted set of preferences for a benchmark setting in which money burning is not allowed. We also apply our findings to a model of cooperation and to a model with quadratic preferences and families of distribution functions. In addition, we provide several comparative statics results.

We propose a general and highly efficient method for solving and estimating general equilibrium heterogeneous-agent models with aggregate shocks in discrete time. Our approach relies on the rapid computation and composition of sequence-space Jacobians—the derivatives of perfect-foresight equilibrium mappings between aggregate sequences around the steady state. We provide a fast algorithm for computing Jacobians for heterogeneous agents, a technique to substantially reduce dimensionality, a rapid procedure for likelihood-based estimation, a determinacy condition for the sequence space, and a method to solve nonlinear perfect-foresight transitions. We apply our methods to three canonical heterogeneous-agent models: a neoclassical model, a New Keynesian model with one asset, and a New Keynesian model with two assets.

In the context of interwar Poland, we find that Jews tended to be more literate than non Jews, but show that this finding is driven by a composition effect. In particular, most Jews lived in cities and most non-Jews lived in rural areas, and people in cities were more educated than people in villages regardless of their religion. The case of interwar Poland illustrates that the Jewish relative education advantage depends on the historical and institutional contexts.

Using millions of historical census records and modern birth certificates, we document that immigrants assimilated into US society at similar rates in the past and present. We measure cultural assimilation as immigrants giving their children less foreign names after spending more time in the United States, and show that immigrants erase about one-half of the naming gap with natives after 20 years both historically and today. Immigrants from poorer countries choose more foreign names upon first arrival in both periods but are among the fastest to shift toward native-sounding names. We find substantial cultural assimilation for immigrants of all education levels.

The U.S. dollar exchange rate clears the global market for dollar-denominated safe assets. We find that shifts in the demand and supply of safe dollar assets are important drivers of variation in the dollar exchange rate, bond yields, and other global financial variables. An increase in the convenience yield that foreign investors derive from holding safe dollar assets causes the dollar to appreciate, and incentivizes foreign debtors to tilt their issuance towards dollar-denominated instruments. U.S. monetary policy also affects the dollar exchange rate through its impact on the supply of safe dollar assets and the convenience yield. Interest rate spreads with foreign countries are not sufficient statistics to gauge the impact of the stance of U.S. monetary policy on currency markets. The U.S. Treasury basis, which measures the yield on an actual U.S. Treasury minus the yield on an equivalent synthetic U.S. Treasury constructed from a foreign bond, provides a direct measure of the global scarcity of dollar safe assets.

Systemic risk arises when shocks lead to states where a disruption in financial intermediation adversely affects the economy and feeds back into further disrupting financial intermediation. We present a macroeconomic model with a financial intermediary sector subject to an equity capital constraint. The novel aspect of our analysis is that the model produces a stochastic steady state distribution for the economy, in which only some of the states correspond to systemic risk states. The model allows us to examine the transition from "normal" states to systemic risk states. We calibrate our model and use it to match the systemic risk apparent during the 2007/2008 financial crisis. We also use the model to compute the conditional probabilities of arriving at a systemic risk state, such as 2007/2008. Finally, we show how the model can be used to conduct a macroeconomic "stress test" linking a stress scenario to the probability of systemic risk states.

That seafaring was fundamental to Roman prosperity in the eastern Mediterranean is beyond doubt, but a tendency by scholars to focus on the grandest long-distance movements between major cities has obscured the finer and varied contours of maritime interaction. This book offers a nuanced archaeological analysis of maritime economy and connectivity in the Roman east. Drawing together maritime landscape studies and network analysis, Roman Seas takes a bottom-up view of the diverse socioeconomic conditions and seafaring logistics that generated multiple structures and scales of interaction. The material record of shipwrecks and ports along a vital corridor from the southeast Aegean across the northeast Mediterranean provides a case study of regional exchange and communication based on routine sails between simple coastal harbors. Rather than a single well-integrated and persistent Mediterranean network, multiple discrete and evolving regional and interregional systems emerge.

This analysis sheds light on the cadence of economic life along the coast, the development of market institutions, and the regional continuities that underpinned integration-despite imperial fragmentation-between the second century BCE and the seventh century CE. Roman Seas advances a new approach to the synthesis of shipwreck and other maritime archaeological and historical economic data, as well as a path through the stark dichotomies-either big commercial voyages or small-scale cabotage-that inform most paradigms of Roman connectivity and trade. The result is a unique perspective on ancient Mediterranean trade, seafaring, cultural interaction, and coastal life.