This paper analyzes a small open economy model under a monetary regime that targets the consumer price index. It is explained why such a regime is vulnerable to speculative currency attacks. There are two differences to the exchange rate targeting case: (i) The attack takes place over a short period of time as opposed to instantaneously. (ii) Reserve losses attributable to the attack are smalle...

Available online 8 October 2011 We examine the effects of trade and services liberalization on wage inequality in India. We find that labor reallocations and wage shifts attributable to liberalization account for at most 29% of the increase in inequality between 1993 and 2004, and that the effects of services reforms are many times larger than those of trade liberalization. In contrast, 30–66% ...

We build a variation of the neoclassical growth model in which nancial shocks to households or wealth shocks (in the sense of wealth destruction) generate recessions. Two standard ingredients that are necessary are (1) the existence of adjustment costs that make the expansion of the tradable goods sector di cult and (2) the existence of some frictions in the labor market that prevent enormous r...

In this paper, we use a unique dataset on the distribution of output and demand across regions of the United States to estimate trade costs for 969 service and manufacturing industries. Our estimation method is a natural extension of the gravity model of trade and identifies trade costs in the absence of trade data. The estimated trade costs are higher on average for service industries, but the...

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper shows that the dominant view that the high variabi...

this paper tries to survey the effective factors in creating an appropriate environment for improving advanced technologies in iranian national oil company and it offers some solutions for applying these technologies. in the beginning, the paper mentions the growing demand for oil more than its global supply in the years to come as well as the need to increase the oil reservoirs and recycling c...

In an international oligopoly model, this paper investigates interaction between trade liberalization in goods and liberalization in service FDI. Since some services are market-specific and have non-tradable nature, a foreign firm has a higher cost in service provisions compared to its domestic competitor and it can overcome the disadvantage by either outsourcing services to the domestic compet...

This paper studies the effects of terms of trade volatility on growth. First, we present a simple two-sector model where it is costly to initiate tradable goods production and terms of trade volatility decreases the labor force share of the tradables sector and GDP. Second, we show that the authorities can use international liquidity (reserves) to stabilize the real exchange rate, restore the e...

Industria imports oil, produces final goods and wishes to mitigate global warming. Oilrabia exports oil and buys final goods from the other country. Industria uses the carbon tax to impose an import tariff on oil and steal some of Oilrabia's scarcity rent. Conversely, Oilrabia has monopoly power and sets the oil price to steal some of Industria's climate rent. We analyze the relative speeds of ...

A recent preliminary ruling by the European Court of Justice, that would have ended the Swedish state retail alcohol monopoly on grounds of European law on free movement of goods, highlights the international pressure on countries to deregulate further their alcohol markets. However, those countries that have recently taken the road to deregulation have not been able to prevent the alcohol indu...