Some recent empirical findings are used to motivate employing a model in which consumption exhibits durability, and habits develop over the flow of services provided by them, in order to study the effects of tariff protection on the current account. Durability leads to adjacent substitutability...

We consider a federation with three regions and an imperfectly mobile population. If in the Nash equilibrium one region makes transfers to the other two then the outcome is efficient. If in the Nash equilibrium two regions make transfers to a third region the outcome may be inefficient, because...

A model in which consumption exhibits durability, and habits develop over the flow of services provided by them, is used to study the effects of exchange rate policies. The results of recent studies with regard to the effects of exchange rate policies are brought closer to some recent empirical...

This paper examines the effects of policy coordination in a two-country model of endogenous growth. Governments choose taxes to provide public inputs and public consumption goods. Tax rates affect the rewards to investment and rates of economic growth. Two regimes are examined: one with...

The effects of inflation are worked out for a small open economy with Cash-in-Advance (CIA) constraints on bond purchases. If all transactions are subject to CIA constraints, an increase in the inflation rate will reduce savings, bringing about a current account deficit, while the capital stock...

The effects of inflation are considered for a small open economy with overlapping generations and a cash-in-advance constraint on consumption. In an endowment economy with one good, the model recovers the adjustment mechanism underlying the monetary approach to the balance of payments, which...

The effect of inflation on the capital stock is considered in an overlapping generations framework with a Cash-in-Advance constraint on consumption expenditures. The adjustment mechanism underlying the model is that of a traditional model with the real balance effect on savings.