We introduce financial frictions into a simple two sector model of international trade with heterogeneous agents and investigate the impact of differences in the strength of financial institutions and wealth inequality on trade flows, capital movements and entrepreneurial migration. Distinct...

Research in both economics and psychology suggests that, when agents predict the next value of a random series, they frequently exhibit two types of biases, which are called the gambler's fallacy (GF) and the hot hand fallacy (HHF). The gambler's fallacy is to expect a negative correlation in a...

We develop a small, open economy, two-sector model with heterogeneous agents and endogenous participation in a labor matching market. We analyze the implications of asymmetric market entry costs for the patterns of international trade and underemployment. Furthermore, we examine the welfare...

We analyse the selectivity criteria used by institutional donors when they allocate funds to NGOs. A simple screening model predicts that donors who care more about efficiency will screen NGOs and concentrate their funding on those that operate accordingly while donors who care less about...

Countries differ on the extent to which their financial system relies on banks or on the financial market. We offer a model featuring a possible two way relationship between countries' financial system architecture and their comparative advantage. Countries specialising in bank dependent sectors...