First of all, I want to thank Paul Krugman for inspiration, many free books and fun conversations. I often pinch myself, as a reality check, when noting that such a preeminent economist — and definite future Nobel laureate — is supervising my work. I guess this is what makes Princeton so special. Many thanks to all who have read this thesis, including (and especially) Alan Blinder, Hyun Song Shin, Gene Grossman, Nobuhiro Kiyotaki, and Lars Svensson, as well as classmates and friends. Also, much appreciation to Thijs van Rens and Vasco Cúrdia for help with SWP, and to Gene Grossman, who helped me secure funding when I was post-enrolled (the bane of the graduate student). The usual caveat applies: All remaining errors in this dissertation are my own. The many years spent at Princeton have been unbelievable, eliciting from me a myriad of emotions. I will cherish my experiences and especially my friends, who added much delight to times spent in Princeton. There are too many people to thank individually for all the camaraderie that I have enjoyed, so I will instead begin by thanking groups that are dear to me. Foremost, I must thank colleagues, faculty and staff from…
