We compare the trends and determinants of U.S. profits with those of Japan, Germany and Canada in a model of pricing-to-market in the export and domestic markets. We find that during the 1970s increasing unit production costs lowered profits in all countries. After 1980, cost factors still...

If a nation fails to satisfy its intertemporal budget constraint (IBC) then, like a government or a household, either it will become insolvent or it can consume more of its income. The main purpose of this paper is to establish necessary and sufficient conditions for a nation to satisfy its IBC,...

Using a new methodology that allows nonlinearities, we find frequent support for external debt sustainability in a number of Latin American countries. Our findings reverse the results for several countries, obtained with traditional unit-root tests and present a richer framework for evaluating...

This paper examines the consequences for the sustainability of fiscal policy of imposing restrictive ceilings on deficits and debt. Our theoretical framework is a generalization of the government intertemporal budget constraint which allows for time-varying interest rates, endogenous primary...

This paper analyses the effects of monetary shocks in the determination of exchange rates in economies where banks play a central role in providing finance for domestic investment and in international capital transactions. This is a situation that prevails in many countries, both developed and...

This study examines whether the move toward a single European currency leading to internationalization of major European currencies has challenged the dollar's supremacy since the 1980s. We find that the decline of the international role of the dollar, which started right after the collapse of...

Since the collapse of the Bretton Woods system in the early 1970s, the choice of the exchange rate regime has been the subject of a lively debate in international finance. In this study, we investigate the determinants of three exchange rate regimes (fixed, flexible and intermediate). Our...