This paper revisits the question of how brain drain affects the optimal education policy of a developing economy. Our framework of analysis highlights the complementarity between public spending on education and students' efforts to acquire human capital in response to career opportunities at...

This paper examines the welfare implications of foreign aid within the framework of a two-period, two-country model of international trade. It is up to the donor country to decide what fraction of any given aid package is to be made available for the recipient?s immediate, period-one...

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...

This paper examines the problem of guest-worker migration in an economy populated by identical, utility-maximizing agents with finite lives. The decision to migrate, the savings rate while abroad, and the migrants stay in the foreign country as viewed as the solution to an intertemporal...

This paper studies the dynamics of the balance of payments in response to policy disturbances under the assumption that the central bank devalues the country's currency over time at a constant preannounced rate. Depending on the model parameters, a given distribution may result in qualitatively...

This paper develops a two-period, two-country model of trade in exhaustible resources. It studies how asymmetries in per-capita resource endowments and rates of time preference determine the equilibrium patter of international trade. The degree of intertemporal consumption substitution plays a...

A two-country portfolio balance model is developed to analyse the international transmission of monetary and commercial policy disturbances under flexible exchange rates. Emphasis is placed on the role of capital mobility, differences in money demand functions across countries, and national...

This paper develops a two-country model of international migration to study the implications of opening a minimum wage economy to migration. An inflow of foreign labour may lower the income of the country's native factors of production. Moreover, while an increase in the minimum wage reduces...

This paper analyses the dynamics of labour-market adjustment in response to sectoral shifts using a two sector model. We focus on the interaction between the level of wages and the productivity of finding a job. The model highlights to different speeds of adjustment under the assumption of...