We propose an extension of the incomplete markets general equilibrium model with production to situations in which firms default. In the model, firms are assumed to be owned by a single individual whose roles as entrepreneur and consumer are anonymous. Assets are exogenously collateralised and...

Most growth models imply positive impacts on economic growth from greater openness. And a key factor linking openness and growth is the efficiency with which resources are used. Empirically, however, the efficiency impacts of trade have been ambiguous. Using a stochastic frontier analysis, we...