The phenomenon of rising wage inequality has been extensively documented in OECD countries. In the final quarter of the last century it appears to have been particularly marked in the US and UK. The drivers of rising inequality have been subject to econometric analysis and the relative roles of...

We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in...

We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in...