This paper aims at clarifying the conditions under which nancial globalization originates welfare gains in a simple endogenous growth setting. We focus on the capital-deepening e ect of nancial globalization in an open-economy AK model and we show that constrained borrowing triggers substantial welfare gains, even at small levels of international nancial integration, provided that the autarkic ...

April 3, 2011 Abstract How does access to imported capital goods affect the quality of investment in poor countries? From 1949 to 1957, China imported most of its industrial plants from the Soviet Union, but in the late 1950s a series of political disputes ended their trading relationship. In 1960, China entered a period of autarky which persisted until 1978. In market settings, closure to capi...

This paper shows that free trade reduces the welfare of a small country with unemployment unless the free trade price if the importable falls below the autarky equivalent price. A decline in the price of the importable from the autarky level not only improves the terms of trade but also reduces employment and production in the importable sector. A numerical example illustrates that the autarky ...

This paper investigates long-run consequences of international trade between two economies inhabited by two distinct races using different languages. If wages are not equal in autarky, free trade encourages the workers of the low-wage country to learn the language of the high-wage country. As the bilingual population increases in the low-wage country, products are increasingly produced in the d...

This paper investigates the interlinkage in the business cycles of large-country economies in a free-trade equilibrium. We consider a two-country, two-good, two-factor general equilibrium model with Cobb-Douglas technologies and linear preferences. We also assume decreasing returns in both sectors. We first identify the determinants of each country’s accumulation pattern in autarky equilibrium,...

We consider a specific class of combinatorial search or optimization problems where the search space gives rise to a closure operator and essentially the hulls are the only relevant subsets that must be checked in a brute force approach. We suggest that such a closure property can help to reduce time complexities. Moreover we propose two types of (structural) parameterization of instance classe...

Bank crises, by interrupting liquidity provision, have been viewed as resulting in welfare losses. In a model of banking with moral hazard, we show that second best bank contracts that improve on autarky ex ante require costly crises to occur with positive probability at the interim stage. When bank payoffs are partially appropriable, either directly via imposition of fines or indirectly by the...

Social acceptance is a multifaceted consideration when planning future energy systems, yet often challenging to address endogeneously. One key aspect regards the spatial distribution of investments. Here, I evaluate cost impact and changes in optimal system composition development infrastructure more evenly shared among countries regions fully renewable European power system. deliberately devia...

Most existing evidences for indeterminacy are obtained from analyzing models that do not consider trade. This paper considers an extension of Nishimura and Shimomura (Journal of Economic Theory, 2002) Heckscher-Ohlin framework by removing sector-specific externalities in one country while maintaining all other assumptions previously made by the authors. We show that even though indeterminacy ar...

Certification schemes for credence goods can be binary in structure or have multiple tiers. We present a theory explaining how standard-setting organizations choose between these two forms, and compare the differing incentives of industry trade associations and non-governmental organizations (NGOs) in setting standards. For either type of scheme in autarky, the choice between a binary and a mul...