We show how to obtain the exact power envelope of tests for a unit root against trend-stationary alternatives, under normality. This is in contrast to the asymptotic power envelope derived by Elliott, Rothenberg and Stock (1996), and is used to indicate the lack of power of unit root tests in...

The paper examines the time-series evidence relating to participation rates in further education in England and Wales, and uses cointegration analysis to identify a long-run statistical relationship in the data consistent with an augmented human-capital model. The recent rapid growth of...

A two-country differentiated duopoly model is set out in which economic integration increases firms' incentives to invest in R&D, purely through the effect of increased intensity of competition between firms. The model is extended to incorporate knowledge spillovers, which, if related to the...

Intertemporal models of the current account generally assume that global shocks do not affect the current account. We use this assumption to identify global and country-specific shocks in a bivariate VAR. We test the quality of the identification using evidence from G7-data. In accordance with...

We document and account for two facts regarding the relation between international interest rates and total factor productivity (TFP) in a sample of developing countries. First, there is a negative correlation between both variables at quarterly frequency. Second, the share of agricultural labor...

This paper provides a characterisation of the set of dynamic models in which symmetric duopolists have incentives to raise their common cost. The dynamic analysis has two advantages over existing static models. First, it avoids conceptual weaknesses, allowing conjectures to be derived...