Empirically, the relative volatility of consumption to output decreases with income. The standard small-open economy real business cycle model, however, produces a positive relationship. We can recover the negative relationship when we augment the standard model with micro-founded expropriations...

We explore how exporting affects energy consumption. One concern about international trade is its impact on the environment: when a firm exports more, it expands its output, increasing pollution. This concern would be mitigated if exporters use “cleaner” technologies than non-exporters....