Electronic Markets as new mechanisms for co-ordinating allocation of goods, are supposed to reduce the trading immanent transaction costs, especially when the traded goods are digitally represented. A market with no transaction costs is theoretically the most efficient possible allocation mechanism. The US government has recently passed the Acid Rain Act, which uses a system of tradable permits...

We show that deviations from the law of one price in tradable goods are an important source of violations of absolute PPP across countries. Using highly disaggregated export data, we document systematic international price discrimination: at the U.S. dock, U.S. exporters ship the same good to low-income countries at lower prices. This pricing-to-market is about twice as important as any local n...

A drop in aggregate demand driven by shocks to household balance sheets is responsible for a large fraction of the decline in U.S. employment from 2007 to 2009. The aggregate demand channel for unemployment predicts that employment losses in the non-tradable sector are higher in high leverage U.S. counties that were most severely impacted by the balance sheet shock, while losses in the tradable...

A negative aggregate demand shock driven by household deleveraging is responsible for a large fraction of the decline in U.S. employment from 2007 to 2009. The deleveraging – aggregate demand hypothesis predicts that employment losses in the non-tradable sector will be higher in high leverage U.S. counties that experienced the bulk of the deleveraging process, while losses in the tradable secto...

This paper investigates the consequences of designing domestic incentive regulation under asymmetric information in the general equilibrium context of an open economy. We discuss the implications of such incentive regulation for international specialization and the conditions for trade openness to be still welfare-improving. More specifically, we append to an otherwise standard 2× 2 Heckscher-O...

Abstract Shapiro ( Quarterly Journal of Economics , 2021) conducts an in‐depth empirical analysis to show that dirtier upstream goods face lower import tariffs than cleaner downstream goods. Inspired by paper, we examine how the welfare maximizing on final will differ depending dirtiness and extent cross border pollution. We countries concerned about controlling pollution but own would be encou...