Foreign Direct Investment (FDI) has been growing rapidly, at a pace far exceeding the growth in international trade. Thus, a full understanding of the relationship between trade in goods and FDI is important for obtaining a complete picture of the extent and sources of international linkages. We...

On the eve of a major change in the world monetary system, the adoption of a single currency in Europe, our theoretical understanding of the implications of the exchange rate regime for trade and capital flows is still limited. We argue that two key model ingredients are essential to address...

Using annual data 1963-1989 for technical progress in GECD countries (as measured by Solow residuals constructed using GECD data made internationally comparable through the use of purchasing power parties), the paper first shows that there has been significant international convergence in the...

One of the proudest achievements of classical and neoclassical economics is the derivation of the superiority of free trade. This result is obtained by assuming constant returns to scale, perfect competition and absence of externalities. The recent realization that the incomplete appropriability...

This paper presents a theoretical basis fcr the srgunent that large exchange rate shocks - such as the rise of the dollar from 1980 to 1985 - may shift historical relationships between exchange rates and trade flows. We begin with partial models in which large exchange rate fluctuations lead to...

We analyze a two-country model of trade in both legitimate and counterfeit products. Domestic firms own trademarks and establish reputations for delivering high-quality products in a steady-state equilibrium. Foreign suppliers export legitimate low-quality merchandise and counterfeits of...

In a dynamic economy land and capital serve not only as factors of production but as assets which individuals use to transfer income from workinq periods to retirement. Static models of international trade based on the specific-factors model incorporate only the first of these. Once the second...

Previous work by Dixit and Woodland on the effect of inter-country factor endowment differences on goods trade is extended to include simultaneous factor trade and goods trade. The goods trade pattern with factor trade is compared to that without factor trade. It is for instance shown that goods...