We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in...

We develop a simple theoretical model to examine the impact of the distribution of wealth on the patterns of trade when capital markets are imperfect. Our model predicts that the dispersion of wealth can be a determinant of comparative advantage for low-income countries with poor financial...

We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in...

We develop a simple theoretical model to examine the impact of the distribution of wealth on the patterns of trade when capital markets are imperfect. Our model predicts that the dispersion of wealth can be a determinant of comparative advantage for low-income countries with poor financial...

We introduce financial frictions into a simple two sector model of international trade with heterogeneous agents and investigate the impact of differences in the strength of financial institutions and wealth inequality on trade flows, capital movements and entrepreneurial migration. Distinct...

We develop a simple theoretical model to examine the impact of the distribution of wealth on the patterns of trade when capital markets are imperfect. Our model predicts that the dispersion of wealth can be a determinant of comparative advantage for low-income countries with poor financial...

We document that, at business cycle frequencies, fluctuations in nominal variables, such as aggregate price levels and nominal interest rates, are substantially more synchronized across countries than fluctuations in real output. To the extent that domestic nominal variables are largely...

Traditionally banks have used securitization for expanding credit and thus their profitability. It has been well documented that, at least before the 2008 crisis, many banks were keeping a high proportion of the securities that they created on their own balance-sheets. Those securities retained...

We develop a two-country, two-sector model with a continuum of workers to address the link between migration and trade where policy is determined by a simple referendum. In particular, we address two questions. First, are states already in free trade areas more likely to support full integration...