We propose a small open economy model where agents borrow internationally and invest in liquid foreign assets to insure against liquidity shocks, which temporarily shut out the economy of short-term credit markets. Due to the presence of a pecuniary externality individual agents borrow too much...

We set out a small, open economy model of a city, one with local housing, government production and a non-traded good. We observe that a positive shift in labor productivity in the export sector generally results in a larger, higher-wage and more densely settled city. Production of the local...

Scotland is engaged in a lively and on-going debate on greater fiscal autonomy and independence, which is politically controversial, especially in respect of tax-varying powers. The Scottish Parliament has the power to make a balanced-budget adjustment in public expenditure by varying the basic...