A country’s suitability for entry into a currency union depends on a number of economic conditions. These include, inter alia, the intensity of trade with other potential members of the currency union, and the extent to which domestic business cycles are correlated with those of the other countries. But international trade patterns and international business cycle correlations are endogenous. T...

We show that whether trade is one-way or two-way depends on wage strategies adopted by trade unions. The union’s wage strategy choices themselves depend upon the conditions under which trade takes place, as well as upon the characteristics of both the labour and the product markets in the trading countries. The impact of economic integration on union choices and therefore upon both labour marke...

EU enlargement revives the debate around the participation to the EMU. We use a gravity model to see whether informal barriers have changed over a ten-year period covering the creation of the EMU, and whether their impact on European member countries’ agricultural and food trade has been modified. We find that it has led to lower information costs. We observe a diminishing marginal trade impact...

Gravity equations have been widely used to infer trade  ow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is unfounded. We develop a method that (i) consistently and efŽ ciently estimates a theoretical gravity...

Tax competition for a mobile factor is different in ‘new economic geography settings’ compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to the core-peripher...

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-...

JEL classification: F15 F23 H25 H73 We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic in...

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 regional voting pattern of the Swedish EU-membership referendum is analyzed to determine voters’ preferences over two fiscal regimes: an autonomous Sweden, or Sweden as part of the EU. A major difference between these regimes is that autonomy gives greater national discretion to handle risk-sharing and redistribution between regions. I find that inhabitants of rich and stable regions, with ...

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...