This paper shows that countries with weak banking system and fiscal institutions, should benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence...

The paper develops a unified general equilibrium model including savings with overlapping generations, investment and search unemployment. Long-run analytical results for the small open economy identify capital accumulation as a prime transmission channel. The effects of integration on...