How will capital market imperfections, such as private information and costly state verification, affect international capital market flows between countries that are identical in every way but their initial capital stocks? To answer this question, we devise a dynamic infinite-horizon model with...

We present a model in which capital assets can only be owned by members of a small politically-connected elite ("the oligarchs"), each member of which faces a given risk of being expropriated, and we investigate the implications of such an imperfection of property rights for the transition to a...

This paper develops a dynamic general equilibrium model of North-South trade. Northern firms devote resources to innovative R&D to discover higher quality products and Southern firms devote resources to imitative R&D to copy state-of-the-art quality products. Both innovation and imitation rates...

TB

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and...

The empirical evidence is such that countries with better developed financial markets gain significantly from FDI. This paper formalizes the mechanism through which the trickle down effect of FDI depends on the extent of the development of the domestic financial sector. We model a small open...

In this paper I examine the effects of international technological competition on innovation, growth, and optimal R&D subsidies. I focus on a particular dimension of competition: the share of industries where domestic and foreign research firms compete for innovation. In a version of the...

What effects do more open trade policies have on transitional and long run growth rates? This is the central question in trade and growth. Yet, despite numerous empirical studies over the past twenty-five years there are almost no enduring, robust results on the importance of (openness to) trade...