We analyze how a wealth shift to emerging countries may lead to instability in developed countries. Investors exposed to expropriation risk are willing to pay a safety premium to invest in countries with good property rights. Domestic intermediaries compete for such cheap funding by carving out...

By combining two large data sets (on international trade flows and on mergers and acquisitions M&As), we are able to test two implications of Neary's (2003, 2004a) recent theoretical work. Analyzing M&As in a General Oligopolistic Equilibrium (GOLE) model incorporating strategic interaction...

We study the evolution of voter support for climate policies aimed at containing the effect of climate risk, as weather conditions worsens at a time of rising economic inequality. Households differ in age, beliefs and income, and the scale of intervention to preserve habitable land reflects the...

In contrast to empirical evidence, recent theories of cross-border mergers and acquisitions (M&As) assume perfect knowledge transfers - from high to low productivity firms - between acquirer and target. Using the Melitz (2003) model of heterogeneous firms, we develop a matching model of...

We analyze the political economy of monetary unification among countries with different quality of institutions. Countries with stronger institutions have lower public spending and better productive incentives, even under a stronger currency. Governments under weaker institutions spend more and...