This paper develops a two-country model to investigate the circumstances under which it is beneficial to participate in a currency area. It captures both the real and monetary arguments suggested by the optimum currency area literature in a simple monetary model of trade with nominal rigidities....

The paper presents a model of a risk-averse exporting firm under exchange rate risk. We focus on the economic implications of basis risk. It is shown that the regression dependence assumptions between spot and futures exchange rates are essential in analyzing optimal hedging and export...

In a general equilibrium model, international lending through a non-sovereign financial intermediary (a banking system) to a sovereign borrower is analyzed. Under very pessimistic assumptions, including a principal-agency type of incentive to load future intermediation with certain bancrupcy for...

The problem of selecting bandwidth for nonparametric regression is investigated. The methodology used here is a double-smoothing procedure with data-driven pilot bandwidths. After giving an extension of the asymptotic result of Hardle, Hall and Marron (1992) by transfering the ideas of Jones,...

Discrete choice models and qualitative response models are intimately related. Usually both are based on a logistic specification. In many applications the two approaches have been combined leading to a 'discrete choice model including socio-economic explanatory variables'. The paper desdribes...

The Pollution-Haven Hypothesis suggests that tight environmental standards reduce domestic producers' competitiveness and give rise to their relocating to countries with more lenient standards. This paper questions that relocation is always caused by reduced competitiveness at home. By using a...

A multihousehold economy with production/consumption externalities, environmental taxation, and governmental production of pure, nonexclusive and nonrivalrous public goods is assumed. The production of public goods is financed from environmental tax revenue. Globally valid necessary and...

A global analysis of the welfare effect of changes in tariffs is undertaken in multihousehold economy with any finite number of private and pure (nonexclusive and nonrivalrous) public goods. The sensitivity of the results to various methods of financing the production of public goods is examined...

The paper analyzes the implications of allowing for trade deflection under the restricted origin principle. It is shown that (a) producer trade deflection leads to circular trade and must be ruled out to obtain a trade equilibrium, (b) consumer trade deflection will not occur in a Nash...