The expanding market share of modern service firms creates service-led growth in developing countries. This growth is driven by the gap in labor productivity between modern and traditional services, and is amplified by income effects on consumer demand.
A Theory of Endogenous Degrowth and Environmental Sustainability (with Philippe Aghion, Timo Boppart, Michael Peters, and Fabrizio Zilibotti)
Growth can be consistent with environmental sustainability if it is directed to improving quality rather than increasing quantity. The recent rise of services reflects a transition to quality-oriented growth that may be mismeasured as a growth slowdown.
Risk-sharing causes migrants to move to less productive destinations that provide a better hedge against shocks in their origin location. This effect is testable and observable in gravity equations on migration flows.
Higher Education as an Engine of Service-Led Growth (with Alvaro Cox)
A reform that expanded access to college in Brazil led to greater entry of formal service firms. We argue that the reform improved service production through greater abundance of white-collar labor, and that its impact was reinforced by feedback effects on consumer demand.