Economic interdependence of heterogeneous habit forming consumers is examined by using a two-country model. Due to endogenous interest rate adjustments, consumption-habit dynamics in one country are affected by the other country's habits and preferences. To characterize the interactive dynamics,...

By using a two-country model with habit-forming consumers, this paper shows that the transfer paradox can take place in the free-trade, dynamically-stable world economy. When the debtor is more habituated to consumption than the creditor, an income transfer from the creditor to the debtor raises...

A 2-country model with two groups of agents, workers and capitalists is presented in which economic integration results in an initial phase of catch-up, where the less industrialised country experiences the rise in both capital and labour income. Then, after a certain level of integration has...

We develop a two-country, two-sector model of trade where the only difference between the two countries is their distribution of human capital endowments. We show that even if the two countries have identical aggregate human capital endowments the pattern of trade depends on the properties of...

This paper develops a model of the circumstances under which it is beneficial to participate in a currency area. The proposed two-country monetary model of trade with nominal rigidities encompasses the real and monetary arguments suggested by the optimum currency area literature: correlation of...

In this paper we show that price equalization alone is not sufficient to determine the barriers to international trade. There are many barrier combinations that deliver price equalization, but each combination implies a different volume of trade. We demonstrate this first theoretically in a...

The outcome of the economic performance of individuals is utilised in the form of consumption and consequent welfare. Despite this truism, there is relatively little information available on household consumption behaviour in Hungary stemming from investigations based on economic theory. The...

Die Entwicklung von Arbeits- und Beschäftigungsbedingungen in der Automobilzulieferbranche wird in erheblichem Maße vom Standortwettbewerb zwischen Hochlohn- und Niedriglohnstand-orten geprägt. Die deutschen Standorte stehen dabei insbesondere im Wettbewerbe mit Werken in Mittelosteuropa. Auf...

Translated to a cross-country context, the Solow model (Solow, 1956) predicts that international differences in steady state output per person are due to international differences in technology for a constant capital output ratio. However, most of the cross-country growth literature that refers...