Showing 1 - 10 of 172
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...
Persistent link: https://www.econbiz.de/10012470203
Persistent link: https://www.econbiz.de/10000642959
The most cost-effective policies for achieving CO2 abatement (e.g., carbon taxes) fail to get off the ground politically because of unacceptable distributional consequences. This paper explores CO2 abatement policies designed to address distributional concerns. Using an intertemporal numerical...
Persistent link: https://www.econbiz.de/10012471113
This paper explores the implications of the European single currency within a simple sticky price intertemporal model. The main issue we focus on is how the euro may alter the responsiveness of consumer prices to exchange rate changes. Our central conjectures is that the acceptance of the euro...
Persistent link: https://www.econbiz.de/10012471402
This paper explores a series of general-equilibrium models in which people can choose to be either producers or predators, and in which producers can allocate their resources either to production or to guarding their production against predators. The analysis shows how the ratio of predators to...
Persistent link: https://www.econbiz.de/10012471640
This paper investigates the behavior of the foreign exchange risk premium in two recent two-country intertemporal-optimizing general equilibrium models with sticky nominal prices: Obstfeld-Rogoff (1998) and Devereux-Engel (1998). The foreign exchange risk premium in any general equilibrium model...
Persistent link: https://www.econbiz.de/10012471729
Empirical research on the permanent income hypothesis (PIH) has found that consumption growth is excessively sensitive to predictable changes in income. This finding is interpreted as strong evidence against the PIH. We propose an explanation for apparent excess sensitivity that is based on a...
Persistent link: https://www.econbiz.de/10012471755
interactions, and consequently yields highly inaccurate assessments of excess burden. Prior economic theory implicitly acknowledges … practical alternative to the usual excess-burden approximation. This paper helps fill the gap between theory and practice. First …
Persistent link: https://www.econbiz.de/10012471766
We use the limited participation model of money as a laboratory for studying the operating characteristics of Taylor rules for setting the rate of interest. Rules are evaluated according to their ability to protect the economy from bad outcomes such as the burst of inflation observed in the...
Persistent link: https://www.econbiz.de/10012471783
In this article, we examine the effect of the imperfect mobility of goods on international risk sharing and, through that, on the investment in risky projects, welfare and growth. We find that the welfare gain of financial market openness is not monotonic with respect to investors' risk aversion...
Persistent link: https://www.econbiz.de/10012471806