This paper briefly reviews the empirical evidence on labor market segmentation and presents some new results on the similarity of the pattern of segmentation across 66 different countries. The paper goes on to consider how unemployment might be understood in a labor market segmentation...

Ever since the inception of research on strategic trade policy, economists have warned that the informational requirements are high, and unlikely to be met in practice. This paper investigates the implications of incomplete information for a simple, rent-shifting trade policy of the type...

We present a model of industry evolution where the dynamics are driven by a process of endogenous innovations, followed by subsequent embodiments in physical capital. Traditionally, the only distinction between R&D and physical investment was one of labeling: the first process accumulates an...

History provides us with many examples of multiple country fixed exchange rate regimes that have eventually fallen apart. In light of these failures, why has the EMS been so successful in stabilizing exchange rates among members, and in expanding its membership? This paper argues that one key...

The paper demonstrates the general difficulty of inferring the structure of adjustment costs from aggregated, including industry data, except in the unlikely case that costs are symmetric and quadratic at the micro level. The implications of this difficulty for cross-national comparisons of...

This paper examines evidence on interest differentials under the Bretton Woods system of fixed exchange rates and under the flexible rate system which succeeded it. Under the Bretton Woods system, many countries resorted to capital controls in an attempt to pursue independent monetary policies....

A two-region model is presented in which an imperfectly competitive firm produces a good with increasing returns at the plant level, and in which shipping costs exist between the two markets. Production of the good causes local pollution, and regional governments can levy pollution taxes or...

The literature on networks suggests that the value of a network is positively affected by the number of geographically dispersed locations it serves (the "network effect") and the number of its users (the "production scale effect"). We show that as a result a firm's expected time until adoption...

We investigate the impact of union strength on changes in nonunion wages and employment. The prevailing model in this area is the threat model, which predicts that increases in union strength cause increases in nonunion wages and decreases in nonunion employment. In testing the threat model, we...

This paper shows that the market structure of an economy's research sector is an important determinant of the aggregate growth rate, even though it has hereto been ignored in the new growth literature. To make this point in a concrete context, a simple model is used to show that import...