The paper investigates whether higher financial integration leads in general to slower current account adjustments. The study estimates theoretically founded trade balance reaction functions for a panel of seventy countries from 1970-2004. The empirical analysis finds that adjustment in...

Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the...

The world economy has not still recovered from the effects of the financial crisis that began almost a decade ago first in the US and then in Europe. Policy response to the crisis, the combination of fiscal restraint and ultra-easy monetary policy, has not only failed to bring about a robust...

European economic integration is commonly believed to be incomplete, and that further reforms are needed. In this context, the union of U.S. states is considered the benchmark of complete economic integration and is often the basis for comparison regarding the extent of E.U economic integration....

In this paper, we show that Adam Smith pointed out the existence of the Feldstein-Horioka Paradox or Puzzle and even gave an explanation for it more than 200 years before the publication of Feldstein and Horioka (1980). Smith argues that it is the pursuit of their own security that leads owners...

This paper shows that general equilibrium effects can partly rationalize the high correlation between saving and investment rates observed in OECD countries. We find that once controlling for general equilibrium effects the saving-retention coefficient remains high in the 70’s but decreases...

The carbon emissions abatement, undertaken by some countries, may induce other countries to increase their own emissions. This effect, known as "carbon leakage", may be due to rather different mechanisms. The simplest case is when outside countries do not change their environmental policies and...

The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent, acting solely to maximize the utility of the representative resident in their jurisdiction. We depart from this assumption by allowing for the possibility that policymakers also may be...

Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive...