We investigate how exchange-rate uncertainty affects the foreign direct investment decision of a risk-neutral multinational firm (MNF). We assume the firm can open plants, each with decreasing average costs, in two different countries. Under certainty, the MNF would open only one plant. We...

We develop a model with one innovating northern firm and several heterogeneous Southern firms that compete in a final product market. We assume the southern firms differ in their ability to adapt technology and use this heterogeneity to study the differing incentives of southern governments to...

Abstract Currently Unavailable.

Abstract Currently Unavailable.

 We analyze the effects of trade liberalization on environmental policies in a strategic setting when there is transboundary pollution. Trade liberalization can result in a race to the bottom in environmental taxes, which makes both countries worse off. This is not due to the terms of trade...

Taking location as given, we study imperfect competition on a circular city. In Bertrand oligopoly, we identify price harmonics as a function of firm unit costs and locations. The sum of oligopoly profits is larger when costs and/or locations are more dispersed in the...

Significant government support for biofuels has led to rapid growth in U.S. ethanol production and research to develop more advanced biofuels. In this paper we construct a general equilibrium, open economy model that captures the rationale typically invoked to justify government intervention in...

We review some of the most significant issues and results on the economic effects of genetically modified (GM) product innovation, with emphasis on the question of GM labeling and the need for costly segregation and identity preservation activities. The analysis is organized around an explicit...

Welfare in a two-product Cournot oligopoly is shown to increase (decrease) with an increase in correlation between unit costs when the outputs complement (substitute) in demand. A more qualified correlation structure is required for the result to apply in a three-product Cournot oligopoly when...