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This paper proposes a model of international trade with capital accumulation and financial intermediation. This is achieved by embedding the Melitz (2003) model into an incomplete-markets neoclassical framework with an endogenous credit market. The model preserves the analytical tractability of...
Persistent link: https://www.econbiz.de/10013109531
This paper examines the historical effects of El Nino on world prices and economic activity. Although the primary focus is on world real non-oil primary commodity prices, the effects on G-7 consumer price inflation and GDP growth are also considered. This paper has several distinct advantages...
Persistent link: https://www.econbiz.de/10014062074
Bayesian model averaging is applied to robustly ascertain the determinants of various output volatility measures, including the downside semi-deviation of growth rates. Financial sophistication variables are found to have qualitatively different effects on volatility. The ratio of government...
Persistent link: https://www.econbiz.de/10014188936
Cycles in the behavior of stock markets have been widely documented. There is an increasing body of literature on whether stock markets anticipate business cycles or its turning points. Several recent studies assert that financial integration impacts positively on business cycle comovements of...
Persistent link: https://www.econbiz.de/10011609909
By using a two-country model with habit-forming consumers, this paper shows that the transfer paradox can take place in the free-trade, dynamically-stable world economy. When the debtor is more habituated to consumption than the creditor, an income transfer from the creditor to the debtor raises...
Persistent link: https://www.econbiz.de/10001644311
There is a huge literature on the effects of uncertainty on trade levels. One very strong result of that literature is that uncertainty should not matter, as long as well developed forward markets exist. The empirical implications of this result, however, are hard to find in the data. We model...
Persistent link: https://www.econbiz.de/10001926041
Global problems require global solutions. The argument presented here at a global level of analysis is that we can learn something from both modernism and postmodernism but that global problems are more adequately addressed and solutions more likely to emerge from critical theory and critical...
Persistent link: https://www.econbiz.de/10014053433
The mobility of skilled labor across firms has been identified as an important source of regional advantage. Scholars have shown how cultural, economic, and legal conditions (such as the nonenforceability of covenants not to compete) affect the development of high tech sectors that are...
Persistent link: https://www.econbiz.de/10014206335
A traditional explanation for why sovereign governments repay debts is that they want to keep good reputations so they can easily borrow more. Bulow and Rogoff show that this argument is invalid under two conditions: (i) there is a single debt relationship, and (ii) regardless of their past...
Persistent link: https://www.econbiz.de/10014214425
Contrary to the classical proposition, the works of Prebisch and Singer launched the controversial hypothesis of long-term decline in the terms of trade of primary products vis-à-vis manufactures and a corresponding decline in the terms of trade of the South vis-à-vis the North. The present...
Persistent link: https://www.econbiz.de/10014223806