The Balassa-Samuelson hypothesis - i.e. that real exchange rates between each pair of countries increase with the tradables sector productivities ratio between these countries, and decrease with their non-tradables sector productivities ratio - has been one of the most prominent frameworks in...

Diese Arbeit geht der Frage nach, wie Außenhandel zu Wirtschaftswachstum führen kann. Da anhaltendes Wirtschaftswachstum nur durch technischen Fortschritt möglich ist, muss Außenhandel deshalb auf die Rate des technischen Fortschritts wirken um Wirtschaftswachstum beeinflussen zu können....

It is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this fixed wage puzzle by adopting a perspective of bounded rationality. We show that share arrangements that fulfill...

The present work deals with a frequently detected failure of the uncovered interest rate parity (UIP) - the absence of bivariate cointegration between domestic and foreign interest rates. We explain non-stationarity of the interest differential via central bank reactions to exchange rate...

This paper considers testing the hypothesis that errors in a panel data model are weakly Cross-sectionally dependent (CD), using the exponent of cross-sectional dependence introduced recently in Bailey, Kapetanios and Pesaran (2012). It is shown that the implicit null of the CD test depends on...

This paper shows why a majority of legislators may vote for a policy that benefits a firm but harms all legislators. The firm may induce legislators to support the policy by suggesting that it is more likely to invest in a district whose voters or representative support the policy. In...

I discuss a dynamic version of the Zodrow-Miezskowski model, where world capital supply is not fixed. The time horizon of the welfare maximizing government is assumed to be infinite whereas the household sector is designed according to the two-period overlapping-generations model. Thus social...

In this paper we extend the zero tax at the top result obtained in the closed economy case with bounded skill distributions for the case of unbounded skill distributions in the presence of international labor mobility and tax competition. We show that in the equilibrium for the tax competition...

This paper takes the policy failure in establishing a global carbon price for efficient emissions reduction as a starting point and analyzes to what extent technology policies can be a reasonable second-best approach. From a supply-side perspective, carbon capture and storage (CCS) policies...

Recent studies indicate that firms often outsource standard and simple tasks, while keeping complex and important inputs inside their boundaries. This observation is difficult to reconcile with the property rights approach of the firm, which suggests that important components should be...