Tanure Veloso, Pedro2021-06-292021-06-292021-04https://hdl.handle.net/11299/220619University of Minnesota Ph.D. dissertation. April 2021. Major: Economics. Advisor: Ellen McGrattan. 1 computer file (PDF); viii, 70 pages.This dissertation consists of two chapters. The unifying theme across them is how government policy affects the allocation of resources in an economy, both at the micro and macro level. The first chapter analyzes the effects of city-level zoning reforms on the spatial distribution of economic activity in a metropolitan area. Using parcel-level property tax and zoning data, I use Minneapolis recent reform, which eliminated single-family zoning lots, to estimate productivity gains in the local housing development sector. I feed the estimated productivity gain into a quantitative spatial model of the Twin Cities, the metropolitan area which Minneapolis is a part of, to compute the effect of the reform on local wages, rents and commuting patterns. The second chapter, in turn, develops a general equilibrium model with sectoral linkages in which firms face borrowing constraints that can be alleviated by government subsidies. I use it to evaluate how the Brazilian government's policy to direct subsidized credit to specific sectors, called earmarked loans, impacts output per worker through two channels. The first one is the general equilibrium effect of alleviating the borrowing constraint of a sector, increasing output. The second channel works in the other direction. In order to raise funds to subsidize loans, the government needs to tax labor and hence distorts households' consumption--labor supply decisions. Whether the first effect dominates the second depends on how relevant the subsidized sector is in the economy's production network structure. I calibrate the model using Brazilian data to study the federal government's decision to increase subsidies for specific sectors in the credit market, perform optimal policy analysis, and investigate how the economy would have performed had the policy not changed.enEarmarked creditMisallocationSpatial EquilibriumZoningThesis or Dissertation