The motivation of our paper comes from David Gale’s seminal work in 1974. He constructed an example of the “transfer paradox” based on three Leontief functions. The transfer paradox is that when there is a set of agents in the home country and that the home country is trading with other countries, then certain public lump-sum tax transfer plans could make all agents in the home country better o...

We study the impact of transfer pricing rules on sales prices, firms’ organizational structure, and consumers’ utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled affiliate; or they can become exporters, i.e., they serve...

This paper presents a model of international trade in differentiated intermediate goods. Because intermediates are invented through costly R&D investments, employing foreign intermediates implies sharing the return to R&D with the inventor country. I first derive a relation of how domestic productivity is related to foreign R&D investments. In the subsequent empirical analysis, industry level d...

Governments may also use religious soft power in pursuit of national interests and objectives. This article focuses on the role of religious soft power in the foreign policy of three states – the United States of America, India and the Islamic Republic of Iran. The main concern is to assess religious actors’ contribution to the foreign policy environment and agenda in each country. The idea of ...

Despite the large amount of private and public resources spent on foreign education, there is no systematic evidence that foreign educated individuals foster democracy in their home countries. Using a unique panel dataset on foreign students starting from 1950, I show that foreigneducated individuals promote democracy in their home country, but only if the foreign education is acquired in democ...

We study the impact of transfer pricing rules on sales prices, firms’ organizational structure, and consumers’ utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled affiliate; or they can become exporters, i.e., they serve...

This paper considers the phenomenon of third party antidumping; that is, the ability of a firm to bring an AD case in a foreign country against third party dumpers. Recent experience in New Zealand is discussed and suggestions are offered as to why a country might wish to permit foreigners to demand that other foreigners increase prices in that country. D 2005 Elsevier B.V. All rights reserved....

This paper reports the short-term forecasting power of the large Global Vector Autoregressive (GVAR) model originally developed by Pesaran, Schuermann, and Weiner (2004a, 2004b; PSW), and subsequently fine-tuned and re-estimated over the period 1979Q1–2003Q4 by Dees, di Mauro, Pesaran, and Smith (2007; DdPS).1 The GVAR model explicitly specifies interdependencies between different countries and...

4 Non-technical summary 5 1 Introduction 7 2 Related literature 11 3 The model 14 3.1 Setup 14 3.2 Stationary equilibria 18 4 Characterizing equilibrium flows and returns 19 4.1 The evolution of beliefs 20 4.2 Optimal portfolio choice 22 4.3 Equilibrium prices, predictability and hedging 24 4.4 Equilibrium flows and returns 26 5 Data 29 5.1 Dividends 29 5.2 Equity flows 32 5.2.1 Data sources 32...