The paper investigates the effects of macroeconomic conditions on firms' capital structure. We introduce a repeated lender-borrower interaction that allows for debt and equity financing to co-exist as optimal securities in every period. The presence of asymmetric information in the market for...

Models with endogenous growth due to production externalities imply that per capita output is positively affected by the size of the labor force (which we interpret as the stock of human capital). In this framework we investigate the effects of labor migration between two countries in the...

“Market Coupling” is currently seen as the most advanced market design in the restructuring of the European electricity market. Market coupling, by construction, introduces what is generally referred to as an incomplete market: it leaves several constraints out of the market and hence avoids...

We develop an economic geography model in which mobile skilled workers choose between working in the production sector or becoming part of an unproductive political elite. The elite sets tax rates on skilled and unskilled workers to maximize its own welfare by extracting rents, thereby...

We investigate the impact of changes in international trade and domestic transport costs on the internal geography of a domestic economy linked to the rest of the World through a hub. We address that issue by developing two three regions model, namely a version of the Footlose Entrepreneur and a...

The competitive equilibrium correspondence, which associates equilibrium prices of commodities ans assets with allocations of endowments, identifies the preferences and beliefs of individuals, this is the case even if the asset market is incomplete.

The burden sharing of pollution abatement costs raises the issue of how to share the costs between entities (country, region or industry) and how the pollution permits should be distributed between the parties involved. This paper explores this issue in the framework of a dynamic endogenous...

We extend Krugman's (1980) two-country two-sector model to a setup with arbitrary numbers of countries and sectors. The extended model predicts an adequately defined "home market effect" only after controlling for cross-country differential accessibility through a theory-based linear filter. We...

We forecast income growth over the period 2000-2050 in the US, Canada, and France. To ground the forecasts on relationships that are as robust as possible to changes in the environment, we use a quantitative theoretical approach which consists in calibrating and simulating a general equilibrium...