In this paper we show that price equalization does not imply zero barriers to trade.
There are many barrier combinations that deliver price equalization, but each combination
implies a different volume of trade.
This paper deals with a classic development question: how can the process of economic
development – transition from stagnation in a traditional technology to industrialization
and prosperity with a modern technology – be accelerated?
This paper determines the most appropriate ways to model diffusion and jump features of exchange
rates. Simulations show that intraday periodicity in volatility prevents conventional tests from accurately
identifying the frequency and location of jumps.
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.
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.