This paper develops a standard trade model of a small open monetary economy with two traded and one non-traded goods. Money is introduced through a generalized cash-in-advance constraint where the share of goods purchases that must be made using cash, varies across sectors. We find that free...

By adding endogenous investment to a flexible-price, money-in-the-utility-function model, this paper studies the role that physical capital plays in stabilizing the real side of the economy when the monetary authority follows interest-rate feedback rules. We show that with inelastic labor supply...

We construct a staged development framework with multi-period discrete choices to study the colonization of Hong Kong, which facilitated the trade of several agricultural and manufactured products, including opium, between Britain and China. The model is particularly designed based on historical...

The focal point in the recent literature on international trade and monopolistic competition is to recast the Chamberlinian partial equilibrium theory in a general equilibrium framework. Using a similar setting, this paper asks whether the Chamberlinian tangency solution is stable under general...

Aid conditional on the purchase of an imported capital good increases the supply of, and demand for, the good. Examining the effects of tied aid on capital accumulation, the current account, and welfare, we find that two resultant conflicting forces render the price of the capital good...