We find that trade and domestic market size are robust determinants of economic growth over the 1960-1996 period when trade openness is measured as the US dollar value of imports and exports relative to GDP in PPP US$ (“real openness”). When trade openness is measured as the US dollar value of imports and exports relative to GDP in exchange rate US$ (“nominal openness”) however, trade and the s...

Although initially originated as a totally empirical relationship to explain the volume of trade between two partners, gravity equation has been the focus of several theoretic models that try to explain it. Specialization models are of great importance in providing a solid theoretic ground for gravity equation in bilateral trade. Some research papers try to improve specialization models by addi...

Using macro- and micro-level data, this article examines China’s productivity growth slowdown after 2007. The authors find that strong investment in infrastructure housing led to lower returns capital. Firm-level evidence suggests limited market entry exit a lack of resource allocation more productive firms were associated with slower manufacturing total factor (TFP) growth. Earlier reforms had...

The presence of moral hazard in the banking sector can have worrying results. This paper examines the role of government guarantees to banks in generating moral hazard in Iran. We test for moral hazard among bank creditors by determining whether protected banks received more funds from creditors than non-protected banks. Empirically, to determine the existence of moral hazard among bank manag...

We study the dispersion of absolute price levels for US cities since 1918. By absolute price levels, we mean price indices that measure the cost of a given consumption basket at each point in time. We find strong evidence that city price levels converge over time and that the dispersion of price levels is lower for US cities than between OECD countries. We argue that price level convergence for...