This paper develops a general equilibrium model to study how the "exorbitant advantage" works, whether it is sustainable, and what may be the consequences if it is removed. Its main findings are: (1) the center country that issues the reserve currency enjoys the "exorbitant advantage" in the...

This paper investigates how monetary shocks are transmitted internationally. It shows that where a national currency is used as an international medium of exchange, the international money is non-neutral. In particular, an increase in the supply of international money leads to a transfer of real...

This paper develops a general equilibrium 2x2 Ricardian model that demonstrates the possibility of immiserising growth as a result of a productivity improvement in a country¡¯s export industry. The model also shows that immiserising growth can be avoided by improving the productivity of the...

This paper develops a general equilibrium model with transaction costs and endogenous and exogenous comparative advantages. The governments are allowed to choose between tariff war, tariff negotiation, and a {\it laissez faire} regime. It shows that the level of the division of labor and trade...

This paper investigates the relationship between economic reforms and constitutional transition, which has been neglected by many transition economists. It is argued that assessment of reform performance might be very misleading if it is not recognized that economic reforms are just a small part...