Purpose - This paper examines the extent to which exchange rate volatility (ERV) is crucial for small island economies. These economies by their very nature and size tend to be net importers and highly dependent on trade for their economic survival. The island of Mauritius is used as a case...

I study how, in the presence of default risk, the Dutch disease amplifies an inefficiency in the sectoral allocation of capital. I develop a sovereign default model with production of tradable and non-tradable goods, and endowments of commodities. Default incentives increase when more capital is...

This paper investigates the similarities between the economy of 1912 Mount Lebanon on the eve of the famine of 1916 and the economy of 2004 Lebanon that set the stage for the major economic and social crisis of 2019. A simple general equilibrium simulation shows that, as long as the Lebanese...

We assess the impact of large-scale asset purchases, commonly known as quantitative easing (QE), conducted by Sveriges Riksbank and the European Central Bank (ECB) on bond risk premia in the Swedish government bond market. Using a novel arbitrage-free dynamic term structure model of nominal and...

The article develops a stylized medium-run post-Kaleckian open economy model with conflict inflation and combines two existing specifications of the income share targets of workers and firms. In the model, only the target of firms is directly affected by the real exchange rate. Workers do not...

Austria is a small open economy that in the last decades underwent two different waves of increasing trade integration: one with Eastern Europe and one with China. Drawing on trade theory, this paper studies the effects of increases in trade with China and Eastern Europe on labour market...