The anecdote is famous. A mathematician, Stan Ulam, once challenged Paul Samuelson to name one proposition in the social sciences that is both true and non-trivial. His reply was: ‘Ricardo’s theory of comparative advantage’; see Paul Samuelson (1995, p. 22). Truth, however, in Samuelson’s reply refers to the fact that Ricardo’s theory of comparative advantage is mathematically correct, not that...

This paper examines whether a country’s stage of development affects its climate sensitivity. The paper begins with a model of agriculture that shows that the effect of development on climate sensitivity is ambiguous, depending on the substitution between capital and climate. To resolve this issue, the climate sensitivity of agriculture in the United States, Brazil, and India is measured using ...

Several important empirical studies (for example, Altonji, Hayashi, and Kotlikoff, 1992, 1996, 1997) have found that households are not altruistically linked in a way consistent with the standard Ricardian model, as put forward by Barro (1974). We built a two-sided altruistic-linkage model in which private transfers are made in the presence of two types of shocks: an observable shock that is pu...

In recent years there has been a growing controversy concerning the e¤ective role of distributional policy in economies in which agents hold altruistic preferences. We show that in order to establish cross sectional Distributional Neutrality households require information on consanguinity links prior to making their decisions on consumption and bequests. If such information is not available due...

In contrast to domestic trade, international trade inherently requires more intensive use of skilled labor with expertise in areas such as international business, language skills, and maritime insurance, and the transoceanic transportation is more capital intensive than the local transportation. In the presence of such bias in factor demands, globalization caused by an improvement in the export...