While there has been significant research to explore the determinants (and frictions) of foreign direct investment (FDI …

nontradables (N) sector grows faster than the tradables (T) sector. Meanwhile, the opposite is true in the aftermath of crisis. We …

the world technology frontier. Financial openness by stimulating current demand, amplifies the crowding out effect and may …

between two building blocks: specialization in non-tradables and financial market imperfections. We show that if a country has … generates significant volatility in the demand for non-tradables. However, when the non-resource tradable sector disappears, the … economy becomes much more volatile, because shocks to the demand for non-tradables - possibly associated with shocks to …

, investment in capital goods and a non-traded good. Such an environment is rich enough to explain several phenomena that are … inexplicable in more barren models. We suggest an explanation of why saving and investment may be correlated even with no … restrictions on trade in assets. We explain why a high saving country may nonetheless borrow from abroad to finance investment. We …

externality is embodied in aggregate investment, the optimal policy calls for subsidizing the cost of capital in the traded sector … reserves may backfire if the needed sterilization would increase the cost of investment in the traded sector …