While language plays an important role in gravity models, there has been little attention to the channels through which a common language promotes bilateral trade. This work proposes separate series for a common language depending upon whether ease of communication facilitates trade through...

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On the basis on quarterly data in 1977-1987, we find that real and financial factors, insolvency and illiquidity, are all important, separate influences on the defaults of French firms. We capture the effects of illiquidity by constructing stationary series for cyclical departures of output form...

It is generally assumed that distance in the gravity model strictly reflects frictions impedingbilateral trade. However, distances North-South could also reflect differences in factorendowment that provide opportunities for profitable trade. This paper investigates the hypothesisthat if we...

"The macroeconomic literature on automatic stabilization tends to focus on taxes and dismiss the relevance of government expenditure except for unemployment compensation. Our results go sharply contrary to this view. We engage in an empirical analysis of 21 OECD countries from 1982 to 2003 and...

Official calculations of automatic stabilizers are seriously flawed since they rest on the assumption that the only element of social spending that reacts automatically to the cycle is unemployment compensation. This puts into question many estimates of discretionary fiscal policy. In response,...