Front Matter Page
Research Department
Authorized for distribution by Eswar Prasad
Contents
I. Introduction
II. Ex Ante Heterogeneity
A. A Simple Model
B. Alternative Assumptions
C. Discussion
III. Ex Post Heterogeneity
A. Permanent Shocks
B. The Law of Two Wages
IV. Other Models
A. Transitory Shocks
B. The Crime Model
V. Ex Ante and Ex Post Combined
VI. Conclusion
Figures
1. Multiple Equilibria
2. Profit as a Function of w
References