This paper studies an economy where agents expect the floating-rate regime to be interrupted on a specific future date by a transitional fixed-rate policy. When the new peg is not revealed in advance, the path of the floating rate in anticipation of pegging is determined by the interaction...

The paper examines the interaction between a resource-exporting and a resource-importing country. The exporter chooses an optimal depletion rate and decides the allocation of the extracted resource between exports and domestic use. Optimal management from a national view entails inefficiency...

This paper studies the effects of a temporary import quota on the real exchange rate and the current account of a small-open economy populated by utility-maximizing individuals. The optimal current-account response is determined by the interactions between two opposing forces: the intertemporal...

An economy's optimal response to temporary and anticipated future changes in government spending is examined in a two-country model which highlights to role of intertemporal consumption substitution (ICS). The qualitative effects of the two countries coordinating their fiscal policy on each...

This paper considers the effects of an increase in the foreign interest rate on a small open economy with indexed wages and sticky prices. It is shown that currency market interventions helps reduce fluctuations in inflation and unemployment, as well as the exchange rate. Complete insulation,...

This paper examines the relationship between factor endowments and the pattern of trade when one of the factors is an exhaustible resource. Differences in the rate of time preference between countries determine the direction of trade, however, the length of the period over which each country...

This paper deals with the role of services in an open economy in the context of the Heckscher-Ohlin trade model. The analysis focuses on services associated with maintenance of durable goods. Assuming services are labour-intensive, we show the type of durable demanded in relatively...

This paper examines utility-maximizing migrants in a system of guest-worker migration. Their pattern of leisure and commodity consumption at home and abroad is analysed and related to those chosen by the natives of the host country and the non-migrants of the source country. Permanent migrants...

This note extends Rivera-Batiz (1982) to examine the role of remittances in determining the effects of migration on welfare of the remaining residents in a small open economy. If the flow of remittances exceeds a certain critical value, the remaining residents benefit from migration, even if...

This paper develops a simple two-country model of international migration in a general equilibrium framework. By distinguishing individuals in terms of ability and age, the model enables an examination of equilibrium flows of migrant, factor rewards in the two economies and also the factors that...