We construct a simple two-country model that enables us to examine the interactions between trade in goods and international capital movement under financial imperfection. We show that they are complements in the sense that trade in goods facilitates capital outflow from the South, which is...

What are the choices the Asia-Pacific community will face if it proceeds further down the path of developing preferential regional trading arrangements? Fragmentation of the region into preferential trading arrangements on a bilateral or subregional basis promises relatively little economic gain...

What are the choices the Asia-Pacific community will face if it proceeds further down the path of developing preferential regional trading arrangements? Fragmentation of the region into preferential trading arrangements on a bilateral or subregional basis promises relatively little economic gain...

This paper uses a rich set of student transcript data to estimate the economic cost incurred by a university when it does not adopt a 'mean-shift grading policy' to fight grade inflation. In a naiuml;ve scenario, where potential moral hazard constraints are ignored or assumed non-binding, the...

The paper analyzes tariff-settings by two large countries, in an alternating move, infinitely repeated game. We find that there always exists a ``non-cooperative'' Markov perfect equilibrium in which countries continue to select their individual Nash tariffs. If countries are patient, however,...

This paper studies the global dynamics of a class of infinitely repeated two-player games in which the action space of each player is an interval, and the one-shot payoff of each player is additively separable in actions. We define an immediately reactive equilibrium (IRE) as a pure-strategy...

This paper studies the global dynamics of a class of infinitely repeated two-player games in which the action space of each player is an interval, and the one-shot payoff of each player is additively separable in their actions. We define an immediately reactive equilibrium (IRE) as a...

The paper shows that efficient cooperation processes exhibit gradualism when each player does not know the likelihood that the other player exercises a stochastically available outside option. Two players, asymmetrically informed on this likelihood, play an infinitely repeated prisoner's dilemma...