An economy's optimal response to temporary and anticipated future changes in government spending is examined in a two-country model which highlights to role of intertemporal consumption substitution (ICS). The qualitative effects of the two countries coordinating their fiscal policy on each...

This paper considers the effects of an increase in the foreign interest rate on a small open economy with indexed wages and sticky prices. It is shown that currency market interventions helps reduce fluctuations in inflation and unemployment, as well as the exchange rate. Complete insulation,...

This paper examines the relationship between factor endowments and the pattern of trade when one of the factors is an exhaustible resource. Differences in the rate of time preference between countries determine the direction of trade, however, the length of the period over which each country...

This paper deals with the role of services in an open economy in the context of the Heckscher-Ohlin trade model. The analysis focuses on services associated with maintenance of durable goods. Assuming services are labour-intensive, we show the type of durable demanded in relatively...

This paper examines utility-maximizing migrants in a system of guest-worker migration. Their pattern of leisure and commodity consumption at home and abroad is analysed and related to those chosen by the natives of the host country and the non-migrants of the source country. Permanent migrants...

This note extends Rivera-Batiz (1982) to examine the role of remittances in determining the effects of migration on welfare of the remaining residents in a small open economy. If the flow of remittances exceeds a certain critical value, the remaining residents benefit from migration, even if...

This paper develops a simple two-country model of illegal immigration to examine the interaction among migrant labour, unemployment rates, and spending by the host country on enforcement. The analysis focusses on the dynamics of immigration policy and its role in determining the mechanism by...

This paper examines the effects of a minimum wage on real income and the composition of the economy's labour force, and studies various policy measures to deal with unemployment problems. It is possible to reduce unemployment by subsidizing education and health services. Policies to restore the...

This paper develops a simple two-country model of international migration in a general equilibrium framework. By distinguishing individuals in terms of ability and age, the model enables an examination of equilibrium flows of migrant, factor rewards in the two economies and also the factors that...

This paper examines the problem of guest-worker migration in an economy populated by identical, utility-maximizing agents with finite lives. The decision to migrate, the savings rate while abroad, and the migrants stay in the foreign country as viewed as the solution to an intertemporal...