The paper analyzes product-level consumption patterns among countries in the OECD in the period from 1985 to 1999. Estimation results find robust evidence of strong convergence in cross-country consumption patterns. The paper also finds a relationship between openness and the cross-country...

The paper develops a general equilibrium model of migration, assimilation and trade, using a random matching framework of culture and trade. The market equilibrium and the social planner’s solution are contrasted and policy implications are given. The model predicts that the presence of...

The paper presents a model that can explain how regional differences emerge in a country as a consequence of foreign trade. The model is based on the widely used increasing returns/transportation costs framework. In addition to the conventional elements, heterogeneous households and imperfect...

The paper analyzes the population dynamics of a country that has two ethnic groups, a minority and a majority. Minority members can choose whether or not to assimilate into the majority. If the minority is small, the long-run outcome is full assimilation. When the minority is large, the unique...

The paper presents a model that analyses the role of cultural differences in international trade. The decision to study foreign cultures and languages is incorporated into a simple trade model, which captures some basic properties of cultural and language barriers. First, cultural costs differ...

The paper builds a two-country open economy model of incomplete exchange rate pass-through. The paper contributes to the existing literature in two ways. First, incomplete pass-through is the result of price discrimination, and not any assumption about price rigidities. The flexible-price model...

The paper builds a two-country open economy model of incomplete exchange rate pass-through. The paper contributes to the existing literature in two ways. First, incomplete pass-through is the result of price discrimination, and not any assumption about price rigidities. The flexible-price model...

This paper develops a flexible price, two-sector growth model with a nominal side to study the role of the exchange rate in transition dynamics. We adopt a standard small open economy model with traded and nontraded goods, where the engines of growth are exogenous productivity improvements and...