This paper is a contribution to the literature on rational design of trade agreements. The World Trade Organization (WTO) is an incomplete contract among sovereign states. Incomplete contracts contain gaps. Ex post, contractual gaps may leave gains from trade unrealized; they may create...

Using NAFTA’s effect on Mexico’s exports as a natural experiment, this paper conducts an empirical analysis on the explanatory power of the two strands of heterogeneous firms trade models: the heterogeneous firms trade (HFT) model and the quality heterogeneous firms trade (QHFT) model. The...

I study the composition of international portfolios under collateral constraints and the implied cross-border transmission of shocks. I develop an international portfolio model with these features, in which leveraged investors seek diversification in both assets and secured liabilities and in...

How do firms' sales interact across markets? Are foreign and domestic sales complements or substitutes? Using a large French firm-level database that combine balance-sheet and product-destination-specific export information over the period 1995-2001, we study the interconnections between exports...

In this paper we combine the tariff evasion analysis of Fisman and Wei (2004) with Rauch and Trindade’s (2002) study of Chinese trade networks. Chinese networks are known to act as trade catalysts by enforcing contracts and providing market information. As tariff evasion occurs outside the...

This paper investigates the effects of equity market integration on the transmission of monetary policy shocks. Based on the assumption that financial market liberalization and integration lead to falling portfolio holding costs, we analyze its effect on a two-country DSGE model with staggered...

This paper provides empirical evidence on the dynamics of prices and wages in Hong Kong. The results imply that the deflation in Hong Kong since 1997 can be understood using a conventional macroeconomic framework wherein foreign influences constitute the basic underlying shocks, and adjustment...

This paper models trade and FDI in a world consisting of two symmetric countries. Using a monopolistic competition model of international trade which includes positive trade costs and endogenous multinational firms, we introduce an intermediate good and allow firms to fragment production...

This paper examines alternative determinants of intra-industry trade (IIT). Technology transfer via vertical FDI can be an alternative determinant to distance and country-specific factors in gravity equations. Vertical FDI is likely to be made in neighbouring countries in the presence of large...

If women have different economic preferences than men, then female economic and political empowerment is likely to change policy and household decisions, and in turn macroeconomic outcomes. We test the hypothesis that female enfranchisement leads to lower government budget deficits due gender...