We consider a symmetric three-stage game played by two regulator-firm hierarchies to capture the scale and technology effects. Each firm produces one good sold on the market. Firms can invest in R&D in order to lower their fixed emission/output ratio and are regulated with costly public funds. Opening markets to international trade leads to both more investment in R&D and production. When the s...

By incorporating human capital accumulation into a dynamic trade model, we examine the relationship between the growth rate and the specialization pattern of a growing economy. We found that as long as its autarky price differs from the world price, a small open-economy eventually specializes completely. Furthermore, the impact of the terms of trade on the growth rate depends on the trade patte...

This paper investigates the implications for international markets of the existence of retailers/wholesalers with market power. Two main results are shown. First, in the presence of buyer power trade liberalization may lead to retail market concentration. Due to this concentration retail prices may be higher and welfare may be lower in free trade than in autarky, thus reversing the standard e¤e...

We develop a model to study the implications of a legal environment on software development and international trade. We show that the degree of contract enforcement a®ects the organizational mode (i.e., in-house or outsourcing) of customized software development. In autarky, a country with weak copyright protection develops customized software only, while a country with strong copyright protect...

We study risk and return on farm and non-farm business enterprises in village economies. A risk-sharing benchmark predicts that only aggregate covariate risk contributes to the risk premium. An autarky benchmark predicts that overall fluctuation, idiosyncratic plus aggregate, is the only concern. Empirical findings from semi-urban and rural Thai households with extensive family networks quantif...

The welfare gains from international coordination of monetary policy are analysed in a two-country model with sticky prices. The gains from coordination are compared under two alternative structures for ...nancial markets: ...nancial autarky and risk sharing. The welfare gains from coordination are found to be largest when there is risk sharing and the elasticity of substitution between home an...

We show that the impact of globalization on growth and wages crucially depends on the labor market structures of the countries involved. We contrast bargaining and perfect competition. Under perfect capital markets, convergence of capital and income per capita always occurs despite di®erent labor market structures. However, di®erent labor market structures prevent convergence of the income shar...

For economies with a fixed finite set of traders, few results characterize Walrasian equilibria by their social choice properties. Pareto efficient allocations typically require lump-sum transfers. Other characterizations based on the core or strategyproofness apply only when, as in continuum economies, agents cannot influence prices strategically. Or the results concern social choice with a va...