The empirical literature provides a wide range of estimates for trade elasticities at the aggregate level. Furthermore, recent contributions in international macroeconomics suggest that low (implied) values of the trade elasticity of substitution may play an important role in understanding the...

The real exchange rate is very volatile relative to major macroeconomic aggregates and its correlation with the ratio of domestic over foreign consumption is negative (Backus-Smith puzzle). These two observations constitute a puzzle to standard international macroeconomic theory. This paper...

We investigate the connection between commodity price shocks and unemployment in advanced resource-rich small open economies from an empirical and theoretical perspective. Shocks to commodity prices are shown to influence labour market conditions primarily through the real exchange rate...

Strategic interactions between policymakers arise whenever each policymaker has distinct objectives. Deviating from full cooperation can result in large welfare losses. To facilitate the study of strategic interactions, we develop a toolbox that characterizes the welfare-maximizing cooperative...

The global collapse in economic activity triggered by individual and policy-mandated responses to the spread of COVID-19 is unprecedented both in scale and origin. At the time of writing, U.S. GDP is expected by professional forecasters to contract a staggering 6 percent over the course of 2020...

The global collapse in economic activity triggered by individual and policy-mandated responses to the spread of COVID-19 is unprecedented both in scale and origin. At the time of writing, U.S. GDP is expected by professional forecasters to contract a staggering 6 percent over the course of 2020...

This paper investigates the behavior of rent-seeking politicians in an environment of increasing economic integration. The focus of the paper is on the implications of globalization-induced political yardstick competition for constitutional design with a view to the current discussion in the...