We study optimal asset portfolio choice in a two-country search-theoretic model of monetary exchange. We allow assets to not only represent claims on future consumption, but to also serve as means of payment. Assuming foreign assets trade at a cost, we characterize equilibria in which different...

Most developing countries are far less productive in agriculture than in the non-agriculture sector compared to the rest of the world. Standard Ricardian trade theory predicts that developing countries should be large importers of food and should have few workers in agriculture. The data is in...