The Marshall/Lerner condition is examined in a context in which full account is taken of the intertemporal optimizing conditions inherent in the balance of payments. This analysis suggests that the condition has only a very limited significance.

The parpose of this paper is to model and describe the consequences for labor markets in an underdeveloped economy of foreign Investment in an enclave sector.Foreign technology tends to expose some of the hidden talents in the local labor force.Replacement of foreign labor by domestic labor...

The paper explores the prospects for international environmental cooperation in a context of limited enforcement, if we allow for side-payments between countries and sequential moves in the implementation of the agreement. The framework of the analysis is a static model of heterogenous countries...

A new view is emerging in the economic literature on how to analyze and interpret national and subnational revenue systems. Recent work has shown that such systems can be modelled successfully as sets of related policy instruments that are being shaped and used deliberately by vote-maximizing...

Net international capital movements entail equivalent net resource transfers. Arbitrage in perfectly integrated finan-cial markets instantaneously eliminates yield differentials through valuation adjustments. But the stock adjustments that constitute the essence of net capital movements may also...

The paper reviews an algorithm for the iterative solution of rational expectations models. It shows in detail how general equilibrium models with perfect foresight and intertemporally optimizing behavior must be set up to be solved numerically with the algorithm. Three examples of intertemporal...

The behavior of asset prices is analyzed in a general equilibrium model where agents not only have preferences over consumption but also (implicitly) over their beliefs. Agents endogenously choose to disregard information contained in a signal if it conflicts with their desired beliefs. In this...

The paper analyses aspects of international capital movements and formation of human capital in a three sector two country growth model. We assume that direct foreign investment from a country with a high level of knowledge goes along with a positive external effect on human capital growth in...