This paper examines the relationship among human capital, total factor productivity growth and convergence using international panel data on macroeconomic indicators and educational attainment. It explicitly allows for the heterogeneity in technology growth across countries by use of the...

We study how time costs, combined with elasticity of substitution across home and foreign goods, can explain the home bias puzzle in a framework of flexible prices. Using a simple two-country model, we show that introducing time costs to an otherwise standard competitive model improves its...

We propose a simple identification scheme for the causes of the violations of uncovered interest parity. Our method uses the serial dependence patterns of excess returns as a criterion for judging performance of economic models. We show that a mean reverting component in excess returns,...

This paper empirically confronts one explanation of spreading regionalism with the European experience. The domino theory asserts that forming a preferential trade area, or deepening an existing one, produces trade diversion that generates new political-economy forces in third nations as...

This paper derives the gravity equation with intermediate goods trade. We extend a standard monopolistic competition model to incorporate intermediate goods trade, and show that the gravity equation with intermediates trade is identical to the one without it except in that gross output should be...

The paper analyzes and compares the effects of domestic monetary policy using DSGE, DSGE-VAR, and VAR based on a two-country open economy model of Korea and the U.S. According to impulse response analysis, a domestic interest rate hike raises won value in the case of DSGE and DSGE-VAR models,...

Although asset price is an important factor in determining changes in external balances, no studies have investigated it from the Chinese perspective. In this study, I empirically examine the underlying driving forces of China's trade balances, particularly the role of asset price and the real...

This paper tested the factors which cause deviation from covered interest rate parity (CIRP) in Korea, using regression and VAR models. The empirical evidence indicates that the difference between the swap rate and interest rate differential exists and is greatly affected by variables which...

This paper tests the mean reverting property of current account in the financial crisis-affected 5 counties of southeast Asia using nonlinear unit root tests of Park and shintani (2004). Our approach is based on the idea that a conventional unit root test has lower power in detecting the...