This paper substantially extends the limited available evidence on existence and extent of downward nominal wage rigidity in the European Union and the Euro Area. For this purpose we develop an econometric multi-country model based on Kahn's (1997) histogram-location approach and apply it to...

In contrast to the present consensus view of stabilization policy, theoretical and empirical research strongly support the consideration of supply-side adjustment to pronounced variations of factor-utilization in order to trace a more realistic pattern of macroeconomic adjustment dynamics within...

I estimate a Gaussian two-factor affine term structure model of bond yields for three countries, the United States, the United Kingdom and Germany. I find a considerable time-varying component of excess returns in the data. They are positively correlated with the slope of the term structure and...

Using pseudo-panel microdata we show that pension generosity affects early retirement decisions. The changes in the average replacement rate and decreases in wealth accrual between 1967 and 2004 have caused an increase in early retirement probabilities from 16% to 63%.

Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), WTO membership does promote bilateral trade, at least for developed economies and if membership includes non-formal compliance. We review the literature in order to identify open issues. We then develop...

Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to international labor mobility. Controlling for institutional quality, trade, and financial openness, we establish a robust and non-negative causal effect of immigration on real percapita income.

This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We es- tablish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time...

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Our results show that expenditure decentralization reduces the number of transnational terror events in a country, while...

In this paper we set up a simple theoretical framework to study the possible source country effects of skilled labor emigration. We show that for given technologies, labor market integration necessarily lowers GDP per capita in a poor source country of emigration, because it distorts the...

Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias. Moreover, it is partly related to a...