The authors use the framework of random matching games and develop a two-country model of the world economy in which two national currencies compete and may be circulated as media of exchange. There are multiple equilibria, which differ in the areas of circulation of the two currencies. In one...

In contrast to domestic trade, international trade inherently requires more intensive use of skilled labour with expertise in areas such as international business, language skills, and maritime insurance, and the transoceanic transportation is more capital intensive than the local...

This paper examines the effects of terms-of-trade changes on the external adjustment of a small open economy where each consumer has a life-cycle saving function. T he supply side of the economy is given by the standard two-sector mod el with two primary factors: labor and capital. It is shown...

Despite the significance of limited labor mobility across sectors, few attempts have been made to produce dynamic models of sectoral adjustment that are consistent with perfect foresight and, yet, flexible enough to allow for a variety of dynamic experiments. This paper proposes a simple...

Does the market economy exacerbate inequality across households? In a capitalistic society, do the rich maintain a high level of wealth at the expense of the poor? Or would an accumulation of the wealth by the rich eventually trickle down to the poor and pull the latter out of poverty? This...

In contrast to domestic trade, international trade inherently requires more intensive use of skilled labour with expertise in areas such as international business, language skills, and maritime insurance, and the transoceanic transportation is more capital intensive than the local...

Most policy debates on regional policies implicitly assume that there is too much concentration. In our two-region economy model of migration, desirable concentration fails to occur under some conditions, and undesirable concentration occurs in others. In the latter case, even though the...