This paper sets forth the foundations for a transactional approach for the performance of arbitrage in foreign exchange markets. Firstly, we review both the standard model of financial arbitrage and the so-called covered-interest arbitrage environment, and we also lay bare striking shortcomings...

In this paper we show that a homogeneous-product market with multiple Bertrand equilibria becomes a market with a single Bertrand equilibrium when we introduce a small degree of product differentiation. When differentiation tends to zero, that Bertrand equilibrium converges to the unique...

Since the beginning of the last century the world is experiencing an important demographic transition, which will probably impact on economic growth. Many demographers and social scientists are trying to understand the key drivers of such transition as well as its profound implications. A...

Si no hay de todo, para todos, gratis; si más es mejor que menos; y si con los recursos productivos se puede hacer más de una cosa, entonces la eficiencia es importantísima. ¿Por qué, entonces, observamos tanta ineficiencia en la realidad? Respuestas posibles: porque los economistas estamos...

This working paper deals with the claim that the decline of multilateralism is but a logical outcome of the present distribution of international power. In a first part, it analyses a double causal claim, namely that the distribution of international power (unipolarity) determines the nature of...

Most analyses of the U.S. Great Moderation have been based on VAR methods, and have consistently pointed toward good luck as the main explanation for the greater macroeconomic stability of recent years. Using data generated by a New-Keynesian model in which the only source of change is the move...

This paper studies the consequences of certain widespread policies for the quality and sustainability of growth. These policies cause economic inefficiency, environmental destruction and increased poverty. The paper develops a political economy model to show why the existence of such policies is...

We propose a new microeconomic explanation for the divergent experiences of economies in forming human capital. We suggest that the positive effect of a longer life expectancy on human capital formation arises from two separate effects: a life expectancy effect and a prolonged intergenerational...