Juan M. Sanchez
Federal Reserve Bank of St. Louis
One Federal Reserve Bank Plaza
St. Louis, MO 63102
Information about this author at RePEc
NBER Working Papers and Publications
|January 2015||Why Doesn't Technology Flow from Rich to Poor Countries?|
with Harold L. Cole, Jeremy Greenwood: w20856
What determines the technology that a country adopts? While many factors affect technological adoption, the efficiency of the country's financial system may also play a significant role. To address this question, a dynamic contract model is embedded into a general equilibrium setting with competitive intermediation. The ability of an intermediary to monitor and control the cash flows of a firm plays an important role in the technology adoption decision. Can such a theory help to explain the differences in total factor productivity and establishment-size distributions across India, Mexico, and the United States? A quantitative illustration suggests the answer is yes.
Published: Harold L. Cole & Jeremy Greenwood & Juan M. Sanchez, 2016. "Why Doesn't Technology Flow From Rich to Poor Countries?," Econometrica, Econometric Society, vol. 84, pages 1477-1521, 07. citation courtesy of
|April 2010||Quantifying the Impact of Financial Development on Economic Development|
with Jeremy Greenwood, Cheng Wang: w15893
How important is financial development for economic development? A costly state verification model of financial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the firm-size distribution for the years 1974 and 2004. It is then used to study the international data, using cross-country interest-rate spreads and per-capita GDP. The analysis suggests a country like Uganda could increase its output by 140 to 180% if it could adopt the world's best practice in the financial sector. Still, this amounts to only 34 to 40% of the gap between Uganda's potential and actual output.
Published: Jeremy Greenwood & Juan Sanchez & Cheng Wang, 2013. "Quantifying the Impact of Financial Development on Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 194-215, January. citation courtesy of
|May 2007||Financing Development: The Role of Information Costs|
with Jeremy Greenwood, Cheng Wang: w13104
How does technological progress in financial intermediation affect the economy? To address this question a costly-state verification framework is embedded into a standard growth model. In particular, financial intermediaries can invest resources to monitor the returns earned by firms. The inability to monitor perfectly leads to firms earning rents. Undeserving firms are financed, while deserving ones are under funded. A more efficient monitoring technology squeezes the rents earned by firms. With technological advance in the financial sector, the economy moves continuously from a credit-rationing equilibrium to a perfectly efficient competitive equilibrium. A numerical example suggests that finance is important for growth.
Published: Jeremy Greenwood & Juan M. Sanchez & Cheng Wang, 2010.
"Financing Development: The Role of Information Costs,"
American Economic Review,
American Economic Association, vol. 100(4), pages 1875-91, September.
citation courtesy of