Countries that specialize in commodity exports often exhibit a correlation between the relevant commodity price and the value of their currency. We explore a natural but little-studied explanation for this correlation. An increase in the commodity price leads to increases in the future values of...

A well-known feature of one-good, multi-agent, Arrow-Debreu economies with identical additively-separable, homothetic preferences is that the consumptions of all agents are perfectly correlated. Such economies are widely used in interpreting business cycles but seem to be inconsistent with...

International risk-sharing which diversifies away income risk will reduced saving, with constant relative risk aversion. It growth arises from the external effects of human capital accumulation then reducing saving will reduced growth. Welfare also may fall with risk-sharing, because endogenous...

The effects of entry and exit by monopolistically competitive intermediate goods producers on equilibrium business cycles are analyzed in the presence of internal returns to scale and external returns to specialization. In the environment studied, market power and endogenous entry and exit, in...

This paper examines the transitional dynamics of economic integration in the two country endogenous growth model of Rivera-Batiz and Romer (1991) and in an extension by Rivera-Batiz and Xie (1992). It is shown that, in the absence of knowledge flows across countries economic integration will...

There has been a great deal of research on trade unions and wage contracts in recent year, but there has been relatively little work on the determinants of contract length. This is unusual given that the duration of union contracts has varied substantially in post-war industrial economies both...

We study the classic transfer problem of predicting the effects of an international transfer on the terms of trade and the current account. A two-country model with debt and capital allows for realistic features of historical transfers: they follow wartime increases in government spending and...

Standard models of international risk sharing with complete asset markets predict a positive association between relative consumption growth and real exchange-rate depreciations across countries. The striking lack of evidence for this link - the consumption/real exchange-rate anomaly or...