We show that the Dutch disease can arise solely because of the distribution of the natural resource rents. In particular, a less equal distribution of the natural resource rents can generate manufacturing sector stagnation and lower long-run growth even for a country with a smaller resource base...

This paper shows how Dutch disease effects may arise solely from a shift in demand following a natural resource discovery. The natural resource wealth increases the demand for non-tradable luxury services due to non-homothetic preferences. Labor that could be used to develop other non-resource...

This paper shows how Dutch disease effects may arise solely from a shift in demand following a natural resource discovery. The natural resource wealth increases the demand for non-tradable luxury services due to non-homothetic preferences. Labor that could be used to develop other non-resource...

We embed a competitive search model with labor market discrimination into a two-sector two-country framework in order to analyze the relationship between international trade and labor market discrimination. Discrimination reduces the matching probability, and output, in the skilled-labor...

For a firm without a readily identifiable brand name, quality reputation may solely reflect the country of origin. In this paper we endogenize country-of-origin reputations and show that these selffulfilling reputations determine not only the average quality of a country’s exports but also the...

Country-of-origin reputations are endogenized in this paper and it is shown that otherwise identical countries can be correctly perceived as differing in their percentage of high-quality producers. These self-fulfilling reputations determine not only the average quality of a country’s exports...

This paper analyzes two prominent institutional rules in the international trading system: a lim- ited cross-retaliation rule characterized by the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) Article 22.3 and a limited punishment rule characterized by the...

ABSTRACT: We introduce stereotype threat in a multiple-productivity signalling model. Existence of multiple self-fulfilling stereotypes, which can generate statistical discrimination, is more likely if there is less variance in the ability distribution. A low endogenously-correct stereotype...

A notable feature of many recent trade agreements is the gradual, rather than immediate, reduction of trade barriers. In this paper we model trade liberalization as a cooperative relationship that evolves gradually in a non-cooperative environment. We show that specialization, capacity...

The broadened scope of the GATT/WTO through successive rounds of trade liberalization is explained as a result of trade-partner specificity, linked agreements, and cross retaliation. In more recent years, however, countries have pursued trade liberalization through sector specific zero-for-zero...