This paper analyzes dynamic movement of outputs and market- clearing when mutually interdependent economies trade. The equilibrium evolution of stocks admit the possibility of monotonic or cyclical behavior, even in the long run. However, the prices eventually reach a steady-state but may...

This paper uses a nonlinear stochastic model to describe inflation-unemployment dynamics in the U.S. after World War II. The model is a vector autoregression with coefficients that are random walks with innovations that are arbitrarily correlated with each other and with innovations to the...

We study infinitely repeated games with observable actions, where players have present-biased (so-called (beta)-(delta)) preferences. We give a two-step procedure to characterize Strotz-Pollak equilibrium payoffs: compute the continuation payoff set using recursive techniques, and use this set...

Many observers were surprised by the depreciation of the euro after its launch in 1999. Handicapped by a short sample, explanations tended to appeal to anecdotes and lessons learned from the experiences of other currencies. Now sample sizes are just becoming large enough to permit reasonable...

This paper analyzes the optimal allocation problem of a small country facing an uncertain technology and trading. It is involved in production of many commodities. Differentiability cannot be guaranteed, hence, the Ramsey-Euler condition of optimality needs to be modified. From the optimality...

A number of recent papers have investigated the growth effects of tax reforms in the context of neoclassical growth models where growth is due to human capital accumulation. Stokey and Rebelo (1995) show that the predicted growth effects disagree to a striking extent and are highly sensitive to...

This paper analyzes the effect of market power in a model with dynamic and biological externalities. When several countries harvest fish in international waters the evolution of fish population is affected by their joint action, thus, generating a biological and a dynamic externality. If there...

International migration can be viewed as a natural experiment, placing a worker into a different economic environment while holding his human capital endowment fixed. Migration data therefore provide an opportunity to learn not only about the economic forces underlying migration, but also about...

We examine the role of public information arrival as a determinant of exchange rate volatility in a microstructure setting capturing the 24-hour nature of the foreign exchange market. The mixture of distributions model is used to motivate the link between information arrival and volatility....

This note reestimates Grossman and Kruegers (1993) SO2 emissions regression including regressors to capture the effects of scale, trade and trade policy. Several new results are obtained. Increases in economic activity have a negative effect on the environment separate from changes in per capita...