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We analyze the conduct of fiscal policy in a financially integrated union in the presence of financial frictions. Frictions create a wedge between the return to investment and the union interest rate. This leads to an over-spending externality. While the social cost of spending is the return to...
Persistent link: https://www.econbiz.de/10012481134
We analyze the conduct of fiscal policy in a financially integrated union in the presence of financial frictions. Frictions create a wedge between the return to investment and the union interest rate. This leads to an over-spending externality. While the social cost of spending is the return to...
Persistent link: https://www.econbiz.de/10014093602
Persistent link: https://www.econbiz.de/10012305821
The first wave of globalization (1830-1914) witnessed a decline in the number of countries from 125 to 54. Political consolidation was often achieved through war and conquest. The second wave of globalization (1950-present) has led instead to an increase in the number of countries to a record...
Persistent link: https://www.econbiz.de/10012456628
After decades of successful growth, economic unions have recently become the focus of heightened political controversy. We argue that this is partly due to the growth of trade between countries that are increasingly dissimilar. We develop a theoretical framework to study the effects on trade,...
Persistent link: https://www.econbiz.de/10012480416
Persistent link: https://www.econbiz.de/10012819466
The first wave of globalization (1830-1914) witnessed a decline in the number of countries from 125 to 54. Political consolidation was often achieved through war and conquest. The second wave of globalization (1950-present) has led instead to an increase in the number of countries to a record...
Persistent link: https://www.econbiz.de/10012940953
This paper develops a theoretical framework to study the interaction between globalization and political structure. We show that political structure adapts to expanding trade opportunities in a non-monotonic way. Borders hamper trade. In its early stages, the political response to globalization...
Persistent link: https://www.econbiz.de/10012997882
Persistent link: https://www.econbiz.de/10012521656
Persistent link: https://www.econbiz.de/10012494087