Given the importance of international goods and materials to the American economy, closing our borders for more than a short period is infeasible. Furthermore, with our growing reliance on just-in-time delivery of foreign goods, even slowing the flow long enough to inspect either all or a statistically significant random selection of imports would be economically intolerable. However, the trans...

This study evaluates the impact of high-skilled immigrants on US technology formation. Speci…cally, we use reduced-form speci…cations that exploit large changes in the H-1B visa program. Fluctuations in H-1B admissions levels signi…cantly in‡uence the rate of Indian and Chinese patenting in cities and …rms dependent upon the program relative to their peers. Most speci…cations …nd weak crowding-...

The paper investigates the impact of EMU on foreign direct investment flows. Using the option value approach to investment decisions, it is possible to show how exchange rate uncertainty hinders cross-border investment flows. By permanently fixing bilateral exchange rates, a currency union can then be expected to spur international investment. Results from a gravity model on a sample of OECD co...

The main purpose of this study is to provide an assessment of the different experiences of convergence of the four less developed EU members (Spain, Portugal, Ireland and Greece) after joining the EU and their main determining factors. Here special emphasis is placed on the assessment of their respective capital stocks, both physical and intangible, given their essential influence on growth and...

We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the “labequipment” model, “labor-for-intermediates” and “directed technical change”. We review applications of the expanding variety framework to the analysis of internat...

We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country’s share of demand cause disproportionate increases in its share of output. In contrast, a constant returns model with national product differentiation predicts a less than proportionate increase...

I show in this paper that incomplete contracts affect a firm’s decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower compared to a world without contractual frictions. Incomplete contracts also provide a novel explanation fo...