This thesis is composed of two articles. In the first one, we propose and implement a new index of vulnerability which is based on a structural time-varying bayesian VAR with a block-exogeneity hypothesis for a given pair of a large economy and a small open economy. The index is based on the sum of the responses of the small open economy to shocks in the large economy over time, thus allowing us to disentangle and measure the source of the shock, impact variables and duration of the co-movement or vulnerability. Our index suggests that the business cycle co-movement is led primarily by country-pair characteristics, but decoupling trends can be observed in a considerable number of country-pairs, specially at long term windows. We provide an application of this approach to a global banks framework - which allows us to measure some yet unmeasured theoretical mechanisms. Using a sample of developed and developing countries, we find no evidence of the prevalence of such mechanisms in business cycle co-movement. In the second article, we study how tax incentives impact the firm s behavior and choices in the labor market. Do tax incentives affect wages? Do these incentives alter the composition of a firm s labor force? And what about its size? To answer these questions, we merge RAIS - a linked Brazilian employer-employee dataset - with a novel, firm-level, dataset on two fiscal incentives programs in the state of Espírito Santo - Invest-ES and Compete-ES. By using a differences-in-differences estimator of intertemporal treatment effects, we study the impacts of these programs on municipality-level and, for the first time, firm-level variables. We do not find statistically significant impact of fiscal incentives on any relevant municipality-level variables. On firm-level variables, however, our results point to higher migration from other municipalities in the state of Espírito Santo and temporary growth in the number of jobs. Regarding wages and educational levels of the labor force, no statistically significant impact was documented.