According to conventional home market effects, free trade tends to shrink the market share for the smaller economy in the differentiated manufacturing goods, and in the extreme, leads to a complete hollowing out of the industry. In departing from the original Helpman-Krugman modeling assumptions...

By focusing on the macroeconomic effects of temporary price shocks, this note clarifies the relationships among the terms of trade, the real exchange rate and the current account. This clarification suggests that a real depreciation might prove incapable of bringing the external imbalance back...

This paper sets up a small open stochastic endogenous growth model to analyze the impact of foreign military threats on the home long-run economic growth rate and welfare. We prove that, in addition to the intertemporal substitution elasticity in consumption, whether the home country is a net...

We set up a two-sector equilibrium growth model with heterogeneous labor to analyze the impact of the creation of common market on the member countries' growth rate. We show that the economic integration will stimulate the backward country's economic growth. In addition, we prove that whether...

This paper explores the growth effects of the enlargement of a common market from two to three countries by making use of a three-country equilibrium growth model with heterogeneous labour. We prove that the enlargement will stimulate the backward countries’ economic growth. In addition, we...

This paper examines the stability of arms races in the Third World countries and assumes that the utility function is separable between the consumption and the weapon stocks. We find that the military expenditures and the weapon stocks will exhibit stability and overshooting takes place for the...

Using the assumption that the vertical multinationals ship capital and intermediate goods from parent in Taiwan to subsidiaries in less-developed countries, this paper extends the Harris-Todaro model to analyze the impacts of globalization on wage inequality and unemployment. We find that an...

We observe that the period between Cold War era and the event of 911, variation in foreign military threats leads to variation in defense resources and fluctuations in the labor market. Using an intertemporal optimization dynamic model, this paper explores the impacts of foreign military threats...

This paper explores the growth effects of the enlargement of an integrated economy by making use of a many-country equilibrium growth model with heterogeneous labor. We prove that the impact of the number of member countries on the integrated economy''s growth rate is positive. In addition, we...