Both global and regional economic linkages have strengthened substantially over the
past quarter century. We employ a dynamic factor model to analyze the implications of these
linkages for the evolution of global and regional business cycles.
We consider the interactions between domestic lobbying and two types of cross-border
lobbying in a Customs Union (CU). The two types of cross-border lobbying are (i) lobbying
from firms in one CU country to the governments of other CU countries, and (ii) that from
firms outside the CU.
The recent financial crisis has focused attention on the relationship between access to finance and international trade, triggering a burgeoning segment of the literature evaluating this link empirically.
Middle Eastern and North African (MENA) countries stand out in international comparisons of de jure obstacles to female employment and entrepreneurship. These obstacles manifest themselves in low rates of female labor participation, entrepreneurship, and ownership.
In this paper we show that price equalization alone is not sufficient to establish that
there are no barriers to international trade. There are many barrier combinations that
deliver price equalization, but each combination implies a different volume of trade.
This paper examines a topic of increasing interest, the potential determinants of extensive (i.e., number of firms) and intensive (i.e., average exports per firm) trade margins, using state-level trade to 190 countries. In addition to distance and country size, other factors affecting trade costs and export demand are explored.
In this paper we provide estimates of the coefficient of relative risk aversion
using information on self-reports of subjective personal well-being from three datasets:
the Gallup World Poll, the European Social Survey, and the World Values Survey.
We study the contraction of foreign direct investment (FDI) flows in the United States during the recent financial crisis and show their unusual non-resiliency, which depends in part on the global nature of the economic recession, but also on the increases in the cost of financing FDI in the economies in which the flows originate.
Characterizing asset price volatility is an important goal for financial economists. The literature has shown that variables that proxy for the information arrival process can help explain and/or forecast volatility.
We examine the interaction between foreign aid and binding borrowing constraint for a recipient country. We also analyze how these two instruments affect economic growth via non-linear relationships. First of all, we develop a two-country, two-period trade-theoretic model to develop testable hypotheses and then we use dynamic panel analysis to test those hypotheses empirically. Our main findings are that: (i) better access to international credit for a recipient country reduces the amount of foreign aid it receives, and (ii) there is a critical level of international financial transfer, and the marginal effect of foreign aid is larger than that of loans if and only if the transfer (loans or foreign aid) is below this critical level.
The current global-imbalance literature (which explains why capital flows from poor to rich countries) is unable to explain China’s foreign asset positions because capital cannot flow out of China under capital controls. Hence, this literature has not succeeded in explaining China’s large and persistent trade imbalances with the United States.
Aguiar-Conraria and Wen (2008) argued that dependence on foreign oil raises the likelihood of equilibrium indeterminacy (economic instability) for oil importing countries. We argue that this relation is more subtle.
Using a dynamic panel data framework, we investigate the relationship between the two major forms of terrorism and foreign direct investment (FDI). We then analyze how these relationships are affected by foreign aid flows.
This article introduces the subject of technical analysis in the foreign exchange market, with emphasis on its importance for questions of market efficiency. “Technicians” view their craft, the study of price patterns, as exploiting traders’ psychological regularities.
Despite the microeconomic evidence supporting the superior idiosyncratic productivity
of multinational firms (MNFs) and their affiliates, cross-country studies fail to find
robust evidence of a positive relationship between foreign direct investment and growth.
I study the aggregate implications of the entry of Multinational Firms (MNFs) in a two country Dynamic Stochastic General Equilibrium model in which firms have heterogeneous productivity in the sense of Ghironi and Melitz (2005).
Substantial evidence suggests that countries with stronger trade linkages have more synchro-
nized business cycles. The standard international business cycle framework cannot replicate
this finding, uncovering the trade-comovement puzzle.
Using formal statistical tests, we detect (i) significant volatility increases for various types of capital flows for a period of changes in business cycle comovement among the G7 countries, and (ii) mixed evidence of changes in covariances and correlations with a set of macroeconomic variables.
This paper evaluates the effect of the Federal Reserve’s large scale asset purchases (LSAP) on
international long bond yields and exchange rates and then considers whether the observed
behavior is consistent with a simple portfolio balance model and previous estimates of
the impact of equivalent federal funds stimulus on exchange rates.
Ethnic networks—as proxies for information networks—have been associated with higher levels of international trade. Previous research has not differentiated between the roles of these networks on the extensive and intensive margins.