Essays in Macroeconomics

This dissertation consists of three papers focusing on the effects of firm and worker strategies on economic aggregates. The first chapter estimates the effects of corporate political connections with Congressional committee members on the rise of market power of large firms in the United States. By exploiting the committee exile as a quasiexogenous shock, it shows that on average 10% higher political connections increase 0.58% in markups. The effects can be mostly explained by lower production cost. The second chapter study how search frictions affect job matching quality and spatial sorting. I develop a spatial general equilibrium model with two-sided heterogeneity and frictional labor markets. The model predicts less spatial sorting when search costs fall, but more sorting with skill-biased technical change. I use this framework to quantify the roles of SBTC, search frictions, and amenities in spatial trends. The third chapter examines how the internal organization of firms shapes asymmetric wage risks over the business cycle using matched employer-employee data in Germany. We document that the internal organization of firms introduces a trade-off between wage premiums and wage risks.