A model of firm innovation illustrates the effects of the threat of imitation and product varieties on a representative firm's decision to invest in research and development to produce new product varieties. The model motivates two empirical questions: (1) Is research and development partially...

July 2000 - In developing countries, increases in current account deficits tend to be associated with a rise in domestic output growth and shocks that increase the terms of trade and cause the real exchange rate to appreciate. Higher savings rates, higher growth rates in industrial economies,...

Estimates of labor mobility costs are needed to assess the responses of employment and wages to trade shocks when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries. The authors propose a method to...

"Recent research highlights the relationship between economic development and productive diversification, which may be hindered by market failures. After identifying stages of diversification in disaggregated export data, the authors develop a metric for the flows of export "discoveries," or...

Estimates of labor mobility costs are needed to assess the responses of employment and wages to a trade shock when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries. In this paper, we propose a method to...