International economic integration yields large potential welfare effects, even in a static constant returns competitive world economy. Our method is novel. The effect of border barriers on trade flows is often inferred from gravity models. But their rather atheoretic structure precludes welfare...

This paper uses a dynamic general equilibrium two-country optimizing sticky-price model to analyze the consequences of international financial market integration for the propagation of asymmetric productivity shocks in a monetary union. The model implies that business cycle volatility is higher...

This paper uses a dynamic general equilibrium two-country optimizing ?new-open economy macroeconomics? model to analyze the consequences of international capital mobility for the effectiveness of fiscal policy. Conventional wisdom suggests that higher capital mobility diminishes the...

The DART model is a multi-sectoral, multi-regional dynamic computable general equilibrium model of the world developed for the analysis of international climate policies. Since the first version of DART was developed at the Kiel Institute for World Economics in 1998, the model has undergone a...