We show that the specification of technology differences in recent empirical studies of trade is not supported by basic growth theory and may lead to biased estimates of the pattern of specialization and trade.

We take the Fujita & Thisse (2003) growth-cum-geography model to investigate the implications of seeing social ties as an important reason for the generation of knowledge. Moreover, we model migration as an important channel through which the distance decay effect of cross-regional knowledge...

We argue that geographical clustering helps the weakest firms to survive. We model this neglected negative externality by adapting the heterogeneous firms model of Melitz (2003) to include firms that invest in R&D and firms that do not. Separating the chance of post-entry market exit into a...

We study the effects of corruption on economic growth in a framework that includes corruption as part of the institutional setting of countries. Using a formal growth framework where corruption affects labor inputs and the provision of public goods, we find that particularly in situations where...

This paper uses a heterogeneous firms model to scrutinize the alleged aim of Fair Trade to help the most disadvantaged producers in developing countries. Incorporating important aspects of Fair Trade in a two-good heterogeneous firm model we show that the more productive firms will join Fair...

We study the effects of preferential trade agreements (PTA) in a model where the income matters for consumption patterns. We develop a three-country Ricardian trade model in which goods are ranked according to priority and where economies differ in their income level. The poorest (richest)...

We reconsider the effects of long run growth on relative factor prices across cones of specialization. We model economic growth as exogenous technological change. Allowing for capital biased technological change with a sector bias and for endogenous commodity prices, we find that economic growth...

We use the largest common factor in 14 items reported in the World Values Surveys as a robust measure of religiosity. This measure is held to identify the importance of religion in all aspects of people's life. The level of religiosity differs by about 50 percentage points between rich and poor...

The agricultural transition, the demographic transition and the democratic transition explain the development paths of the share of agriculture, the population growth rate, and the standard democracy indices. We demonstrate that two related estimation models give contradictory results when...