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This paper introduces a tractable capital market friction mechanism that allows a break of the parity between domestic and external interest rates and generates a gradual evolution of capital stock and other macroeconomic variables--in contrast to the instantaneous convergence found in models...
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The World Bank documents an inverse relationship between GDP per capita and child labor participation rates. We construct a life-cycle model with human and physical capital in which parents make a time allocation choice for their child. The model considers two features that have shown potential...
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Theoretical models of the relationship between investment and the current account impose restrictions on the joint … dynamic behavior of these variables. These restrictions come in two forms. One imposes causal orderings on investment and the … restrictions to identify empirically structural shocks from vector autoregressions of investment and the current account for Canada …
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