This paper presents an endogenous growth model where it is endogenously determined whether entrepreneurs in the poor East choose to innovate or to imitate goods from the rich West. It is shown that we have a unique equilibrium with imitation when trade is relatively expensive, in which case the...

Should the government run fiscal deficits in response to an adverse external shock that reduces national income permanently, warranting transfer of resources from production of non-traded to traded goods? This paper considers fiscal policy implications of sectoral adjustment costs in a model...

Why is there apparently a positive correlation between saving and trade liberalization, in particular for the most successful developing countries? Despite tremendous research efort this puzzle is to a large extent still unresolved. In this general equilibrium model we show one channel which may...

In this paper we use a price endogenous mathematical programming model to estimate the national welfare losses induced by the Norwegian dairy policy. Firstly, we focus on welfare losses at the processing level due to price discrimination between different uses of the milk and cross-subsidisation...