My dissertation consists of three essays on international capital flows. In the first essay, titled "Do small firms benefit more from foreign portfolio investment? Evidence from a Natural Experiment," I test whether an increase in the supply of foreign portfolio capital benefits small firms by...

This paper values a hostile government's option to expropriate a multinational's assets, using stochastic calculus. We assume that the exchange rate follows a geometric Brownian motion process and expropriation events are Poisson distributed through time.

This paper presents a multi-country general equilibrium model driven by productivity shocks, where labor supply and consumption are chosen endogenously. Weuse this framework to study the effect of labor supply for optimal international diversification. We find that the model's ability to help...

This study addresses two questions: where does price discovery occur for internationally-traded firms and ho do international stock prices adjust to an exchange rate shock ?These questions are answered by analyzing quotes originating in New York and Frankfurt for three large German firms,...

Tests of the null hypothesis of stationarity against the unit root alternative play an increasingly important role in empirical work in macroeconomics and in international finance. We show that the use of conventional asymptotic critical values for stationarity tests may cause extreme size...

This essay examines the connection between the establishment of a common market and additional moves to monetary and political union. It then reviews both the monetary and fiscal aspects of ninteenth-century German unification. Finally, it discusses what modern Europe can and should learn from...

This paper outlines an expanded and more challenging role for multilateral development banks (MDBs) in the provision of longer term development finance. The traditional role has to be further refocused and expanded to cover mobilization of private sector resources, both external and internal.

I asked "Does the Current Account Matter?" in Corden (1991). In that article I made a distinction between the Old View and the New View of the current account. The present paper will not repeat the exposition of these two views in any detail. Rather, the aim is both to improve on the rigour of...

This paper develops a Cournot duopoly in which a domestic firm competes with a technologically more advanced foreign-owned firm on the home market.