This paper studies some implications of economic integration in the context of a neoclassical model of international trade, public investment, and capital mobility. Owing to the endogeneity of the productive public capital stock, international capital mobility, while equalizing returns to...

This paper was prepared as a Keynote Address for the ESRC Conference on the Future of Macroeconomics held at the Bank of England Conference Center on April 14, 2000. It uses the empirical framework for formulating and estimating forward looking monetary policy rules developed in Clarida, Gali,...

This paper highlights some of the theoretical and practical implications for monetary policy and exchange rates that derive specifically from the presence of a global general equilibrium factor embedded in neutral real policy rates in open economies. Using a standard two country DSGE model, we...