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 ...

Since 2010, and in line with austerity measures, public employment public-sector compensations to employees have been significantly reduced most Euro Area member states particularly Spain Greece. At the same time, unemployment these two economies was greatly increasing. In a dynamic stochastic general equilibrium (DSGE) model, we demonstrate that cuts wages are more damaging terms of output los...

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...

We investigate the effects of the construction of the national highway system in China on local economic outcomes. The analysis employs three main approaches. The first is based on a structural model of Ricardian trade that provides an explicit description of the general equilibrium effects of changes in the highway network. The second involves reduced form estimates of the casual effects highw...

This paper studies existence and uniqueness of equilibrium in a monetary model in which fiscal policy is Ricardian. The innovation of the paper is to model agents’ expectations as endogenous probabilities which are determined in equilibrium. Since economies with a Ricardian fiscal policy typically exhibit indeterminacy of equilibrium when the monetary policy instrument is the short-term interes...