Migration has important implications for the financial soundness of the pe nsion system, which is an important pillar of the welfare state. While it is common sense to expect that young migrants, even if low-skilled, can help society pay the benefits to the currently elderly, it may nevertheless...

The extent of taxation and redistribution policy is generally determined as a political-economy equilibrium by a balance between those who gain from higher taxes/transfers and those who lose. In a stylized model of migration and human capital formation, we show -- somewhat against the conventi...

In Razin, Sadka and Yuen (1998, 1999a), we explored the policy implications of the home-bias in international portfolio investment as a result of asymmetric information problems in which domestic savers, being "close" to the domestic market, have an informational advantage over foreign portfolio...

The last two decades have witnessed a growing trends toward economic openness. The removal of borders among independent economic system - local, state, national or otherwise - has immense implications for the economic policies of eatch of these systems. Now capital, firms, and labor are able to...

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to emerging economies, especially when they are liquidity-constrained internationally during a global financial crisis. The financial aspects of FDI are the focus of the paper. We analyze the problem of...

Being relatively low earners, migrants are net beneficiaries of the welfare state. Therefore, in a static setup migration may be resisted by the entire native-born population. However, it is shown that in a dynamic setup with a pension system which is an important pillar of any welfare state,...

In this paper, we have emphasized information problems which lead to home bias and insufficient amounts of capital inflows.