This paper proposes open- and closed-economy versions of an endogenous growth model to evaluate the impact of foreign direct investment (FDI) and international knowledge transfers and spillovers on the long-run growth rate of the recipient economy. In the open economy, foreign investors may...

The paper identifies the sources of indeterminacy of monetary steady states in a model of optimum supply of money in which the government maximises revenue through seignorage subject to an underlying inflationary process. We show that the determination of the monetary expansion path is sensitive...

The aim of this paper is to disentangle the effects of trade liberalisation during the mid-1980s from the liberalisation involved in the North American Free Trade Agreement (NAFTA) on exports, imports and the balance of payments in Mexico. The main empirical results suggest that the trade...

We examine the effect of international price arbitrage on the effectiveness of unilateral export controls. The restriction on the quality of exports of security sensitive products limits the outside option of domestic customers: if the product available on the international market is of low...

We re-connect money to inflation using Goodfriend and McCallum’s (2007) model where banks supply loans to cash-in-advance constrained consumers on the basis of the value of collateral provided and the monitoring skills of banks. We show that when shocks to monitoring and collateral dominate...

We consider a simple model that combines elements of search and social learning. Acting in sequence, and observing the action adopted by a previous agent, agents must search for an action. We explore why agent heterogeneity may increase expected payoffs and demonstrate that social learning may...

We analyse the role played by Export Credit Guarantees (ECGs) to encourage exports to developing countries. The existence of moral hazard on the side of the firm is introduced. We show that the inability of the exporter's government to verify the actual quality of the product will limit its...

The derivation of the Balassa-Samuelson effect allows for different empirical specifications that may have important economic implications. Problems related to spurious regression could arise from the mixed order of integration of the series used and from the lack of a long run stable...

Recent empirical literature on trade performance has emphasised the role played by domestic R&D in boosting international competitiveness. These models, based on technology-related theories of trade, find empirical support for this hypothesis. In this paper we go further and test whether trading...

We consider a dynamic model of conformity that permits both a conformist and a non-conformist equilibrium. We provide conditions under which conformity can 'invade' a population. More precisely, starting from a non-conformist equilibrium, we show that the conformity of an arbitrarily small...