We develop a two-country stochastic growth model with production, relative price and sovereign default risks. Domestic production and relative price volatilities cause more fluctuations in the agents' portfolio decisions than the volatility of Foreign Direct Investment (FDI) production does....

This paper examines persistent concerns that trade openness in South-East Europe is much less advanced than it was for the former CEECs in the mid to late 1990s. Using econometric tests, we find that trade patterns appear to remain problematic. Second, partial equilibrium simulations are used to...

We develop a two-country stochastic growth model with production, relative price and sovereign default risks. Domestic production and relative price volatilities cause more fluctuations in the agents' portfolio decisions than the volatility of Foreign Direct Investment (FDI) production does....

This paper examines persistent concerns that trade openness in South-East Europe is much less advanced than it was for the former CEECs in the mid to late 1990s. Using econometric tests, we find that trade patterns appear to remain problematic. Second, partial equilibrium simulations are used to...