This paper estimates the contributions of trade and financial linkages to the directed graph that describes the international propagation of macroeconomic shocks at the business cycle frequency. Among the findings: import and export intensity are asymmetrically associated with shock...

The assumption of rational expectations is potentially a serious source of misspecification in DSGE models. Many recent theories of expectations formation have relaxed rational expectations and improved the predictive properties of benchmark macroeconomic models. Problematically, the space of...

The puzzle of "uphill capital flows," where capital flows out of countries with relatively lower capital stocks and faster-growing TFP, has reattained prominence in the two decades preceding the recent financial crisis in the form of a large and persistent United States trade deficit with the...

This paper develops a model of sovereign debt in which the government has some private information about the domestic economy. Sovereign borrowing is sustainable without enforcement, as repayment is a costly signal about the hidden economic fundamental. The signaling mechanism is able to jointly...

In this paper we use a vector autoregressive approach to analyze the effects of infrastructure investment on economic performance using a newly developed data set for Portugal. We find that investments in other transportation infrastructures – railroads, ports and airports – and social...

We consider the environmental, economic, and budgetary effects of a new carbon tax indexed to the carbon price in the EU-ETS market in the context of a dynamic general equilibrium model of the Portuguese economy. We show that the careful recycling of the carbon tax revenues to finance reductions...

We measure the overall impact of railroad investment on economic growth in the antebellum period in the United States using a bivariate dynamic time series methodological approach, based on the use of a vector autoregressive (VAR) model. We find bidirectional causality between railroad...

In this paper we analyze the effects of infrastructure investment on economic performance in Portugal using a newly developed data set. We employ a vector autoregressive approach to estimate the elasticity and marginal products of investments on twelve different types of infrastructure...

We assess the relative role of fossil fuel prices, energy efficiency and carbon taxation in achieving climate policy goals using a dynamic general equilibrium model of the Portuguese economy with endogenous growth and a detailed modeling of public sector activities. We show that to achieve...

Personal violence, has declined substantially in Europe from 1200-2010. The conventional wisdom is that the state’s monopoly on violence is the cause of this happy result. I find some evidence that does not support this hypothesis. I suggest an alternative hypothesis that could explain at...