b) Consider the Dornbusch-Fischer-Samuelson model of a two country Ricardian world with a continuum of goods. Call the countries US, Europe (E); index the goods by z ; let denote the labor requirement per unit output in each country, and order the goods so that: Œ 0 1 , A z A z U E b g b g , d z dz bb g < 0, where b z A z A z E U b g b g b g d ∫ i . Assume preferences are CobbDouglas and intern...

This paper extends Samuelson’s theory of optimal government purchases by accounting for the contribution of government purchases to macroeconomic stabilization. Using a matching model of the macroeconomy, we derive a sufficient-statistics formula for optimal government purchases. The formula implies that the deviation of optimal government purchases from the Samuelson level is proportional to t...

Here, x0 ∈Ω is an assigned initial point. The multivalued mapping a : Ω→ Πc(R) has compact images and is continuous in the Hausdorff metric. We also assume that at every point x ∈Ω the set a(x) is uniformly locally connected (see [2]). The function u : Ω→ R1 is a given continuous function. In this paper, we study the turnpike property for problem (1.1) and (1.2). The term of turnpike property w...

We analyze a model in which agents make investments and then match into pairs to create a surplus. The agents can make transfers to reallocate their pretransfer ownership claims on the surplus. Mailath, Postlewaite, and Samuelson (2013) showed that when investments are unobservable, equilibrium investments are generally inefficient. In this paper we work with a more structured model that is suf...

In recent years, more and credit institutions have been publishing the financed carbon footprint of their loan portfolio, enabling comparisons across institutions, for which investors supervisors tend to use intensity portfolios expressed as a proportion footprint-to-total volumes. this article, it is argued that such are unfair low-income countries with low price levels, they show same activit...

This paper investigates several key challenges faced by oil-rich countries regarding their economic growth and development. First, it discusses how to determine currency overvaluation for these (if any). To the overvaluation, real exchange rate (RER) is calculated Balassa–Samuelson effect estimated via a regression model. Next, study presents an empirical model assessing impact of oil rent on i...

Abstract The relationship between trade and inequality is complex, the existing literature concludes that impacts of on are ambiguous. This article addresses this ambiguity presents robust evidence effects depend economic development, when it occurred in recent decades, their various measures. It proposes a novel identification strategy to solve for endogeneity problem by using as predicted gra...

This study reexamines the evidence for the Balassa-Samuelson effect for the 1985-2007 period. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro area productivity differential there is a three percentage...