This paper analyzes the relationship between the output gap and inflation. This study uses a newly proposed flexible data-driven measure of the output gap and finds that such a distance weight-based measure of the ex-ante output gap (WAgap), has a significant and better in-sample relation with...

This paper formulates a specific factor model of trade with skilled and unskilled workers as the specific and capital as the mobile factors. Production of goods is subject to intermediation and corruption. We then allow for international capital mobility and show that corruption as an activity...