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Growth and Welfare in a Small Open Economy

Grossman, Gene M. - 2010

We construct a model of growth based on endogenous technological change in a small, open economy. Entrepreneurs develop new intermediate products whenever the present value of potential profits exceeds the cost of R&D. Diversity of intermediates contributes to total factor productivity in the...

Persistent link: https://www.econbiz.de/10013139328

Foreign Investment with Endogenous Protection

Grossman, Gene M. - 2011

Jagdish Bhagwati coined the phrase quid pro quo foreign investment to describe international investments made in anticipation of host country trade policy and perhaps with the intention of defusing a protectionist threat. We apply Bhagwati's notion to situations where (i) foreign investment is...

Persistent link: https://www.econbiz.de/10013125846

A Linder Hypothesis for Foreign Direct Investment

Fajgelbaum, Pablo D. - 2014

We study patterns of FDI in a multi-country world economy. We develop a model featuring non-homothetic preferences for quality and monopolistic competition in which specialization is purely demand-driven and the decision to serve foreign countries via exports or FDI depends on a...

Persistent link: https://www.econbiz.de/10013067204

Balanced Growth Despite Uzawa

Grossman, Gene M. - 2016

The evidence for the United States points to balanced growth despite falling investment-good prices and an elasticity of substitution between capital and labor less than one. This is inconsistent with the Uzawa Growth Theorem. We extend Uzawa's theorem to show that the introduction of human...

Persistent link: https://www.econbiz.de/10013001767

Income Distribution, Product Quality, and International Trade

Fajgelbaum, Pablo D. - 2009

We develop a framework for studying trade in vertically and horizontally differentiated products. In our model, consumers with heterogeneous incomes and tastes purchase a homogeneous good as well as making a discrete choice of quality and variety of a differentiated product. The distribution of...

Persistent link: https://www.econbiz.de/10013156428

Inequality and Unemployment in a Global Economy

Helpman, Elhanan - 2010

This paper develops a new framework for examining the distributional consequences of trade liberalization that is consistent with increasing inequality in every country, growth in residual wage inequality, rising unemployment, and reallocation within and between industries. While the opening of...

Persistent link: https://www.econbiz.de/10012758160

Wages, Unemployment and Inequality with Heterogeneous Firms and Workers

Helpman, Elhanan - 2010

In this paper we develop a multi-sector general equilibrium model of firm heterogeneity, worker heterogeneity and labor … as a function of structural parameters. We find that greater firm heterogeneity increases unemployment, wage inequality … and income inequality, whereas greater worker heterogeneity has ambiguous effects. We also find that labor market …

Persistent link: https://www.econbiz.de/10012759114

Real Wages, Monetary Accommodation, and Inflation

Helpman, Elhanan - 2010

We analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive...

Persistent link: https://www.econbiz.de/10012760153

Separation of Powers and the Budget Process

Grossman, Gene M. - 2010

We study budget formation in a model featuring separation of powers. In our model, the legislature designs a budget bill that can include a cap on total spending and earmarked allocations to designated public projects. Each project provides random benefits to one of many interest groups. The...

Persistent link: https://www.econbiz.de/10012761271

Endogenous Innovation in the Theory of Growth

Grossman, Gene M. - 2010

-run growth process. First, we review the implications of neoclassical growth theory and the more recent theories of 'endogenous …

Persistent link: https://www.econbiz.de/10012763516