This paper develops a model of the banking firm and tests for the presence of 'portfolio separation.' The theoretical model generalizes existing intertemporal adjustment-costs models by assuming that these costs coexist simultaneously on both sides of the bank's balance sheet. Our analysis...

During the past two decades, a growing body of research has explored the implications of increased trade and financial openness for the relationship between output and inflation. This paper reviews proposed theoretical channels through which the degree of openness might ultimately affect the...

This paper combines essential elements of the theory of intra-industry international trade with an imperfect-competition banking framework to develop a model of intra-industry international trade in banking services. The model yields the prediction that if, for instance, the production of...

This paper surveys the literature that uses two-country models to analyze monetary and fiscal policy issues faced in interdependent economies. We discuss sources of structural interdependence that researchers typically include in these models. We describe many of the types of policy interactions...