Trust in the citizens of a potential partner country may affect the decision to trade with or to migrate to a foreign country. This paper employs panel data to examine the causal impact of such bilateral trust on international trade and migration patterns. We apply instrumental variables (IV)...

We investigate the effects of interregional labor market integration in a two-sector, overlapping-generations model with land-intensive production in the non-tradable goods sector (housing). To capture the response to migration on housing supply, capital formation is endogenous, assuming that...

The paper revisits the debate on trickle-down growth in view of the widely discussed evolution of the earnings and income distribution that followed a massive public expansion of higher education. We propose a dynamic general equilibrium model to dynamically evaluate whether economic growth...

This paper analyzes the interaction between intergenerational wealth transmission, human capital investments under uninsurable labor income risk, and economic growth in a small open overlapping-generations economy with heterogeneous agents. It demonstrates how the role of the personal income...

This paper develops a model with multiple market locations in which the quality of intangible assets of firms, provided by management, determines the firms’ performance. Despite an ex ante symmetry of potential entrants, the equilibrium assignment of heterogeneous managerial skills to firms...

This paper uses a two-country model with integrated markets for high-skilled labor to analyze the opportunities and incentives for national governments to provide higher education. Countries can differ in productivity, and education is financed through a wage tax, so that brain drain affects the...

This note provides a simple political economy model which captures the trade-off of political parties between catering to their "core" constituency and appealing to middle-of-the-road voters, who are not intrinsically attached to a party. The analysis reconciles seemingly ideology-motivated...

This paper analyzes the interaction of international migration of high-skilled labor and relative wage income between source and destination economies of expatriates. We develop an overlapping-generations model with increasing returns which suggests that international integration of the market...

This paper shows that dynamic inefficiency can occur in dynamic general equilibrium models with fully optimizing, infinitely-lived households even in a situation with underinvestment. We identify necessary conditions for such a pos- sibility and illustrate it in a standard R\&D-based growth...

<heading format="display" id="h1" implicit="yes" level="1">Abstract</heading> This paper examines the impact of capital market integration on higher education and the link to economic growth. The analysis takes into account that participation in higher education is non-compulsory and depends on individual choice. Due to capital-skill complementarity, integration...