This paper considers a utility maximization and optimal asset allocation problem in the presence of stochastic endowment that cannot be fully hedged through trading financial market. We rely on dynamic programming approach to solve optimization problem. The properties value function, particularly homogeneity, are used reduce HJB equation by one dimension. Furthermore, strategy is derived, its a...

The history of agricultural trade stretches back more than ten millennia, but it became inter-continental from the 17th century and much denser in 19th following repeal Britain's protective Corn Laws 1846 major declines international costs. Trade was chaotic period bookended by two world wars, policy anarchy gave way to greater certainty after General Agreement on Tariffs (GATT) signed 1947. Th...

We study the interplay of inequality and trust in a dynamic game, in which trust increases efficiency and thus allows higher growth of the experimental economy in the future. We find that trust is initially high in a treatment starting with equal endowments, but decreases over time. In a treatment with unequal endowments, trust is initially lower yet remains relatively stable. The difference se...

An empirical tradition in international trade seeks to establish whether the predictions of factor abundance theory match with the data. The relation between factor endowments and trade in goods (commodity version of Hecksher-Ohlin) provide mildly encouraging empirical results. But in the analysis of factor service trade and factor endowments (factor content version of HO), the results show tha...

The central paradigm of world trade patterns divides this into two elements. Trade between North and South is viewed as determined by traditional comparative advantage, largely determined by differences in endowment patterns. Trade within the North is viewed as determined by specialization due to economies of scale and product differentiation. In this paper, we will argue that this division is ...

Consistent with the provocative hypothesis of Engerman and Sokoloff [Engermann, Stanley and Kenneth Sokoloff (1997), “Factor Endowments, Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States,” in Stephen Haber, ed. How Latin America Fell Behind, Stanford CA: Stanford University Press., Sokoloff, Kenneth L. and Stanley L. E...

This paper derives the conditions under which property rights can arise in an anarchy equilibrium. The creation of property rights requires that players devote part of their endowment to the public good. In the Nash equilibrium, no player contributes to the provision of property rights protection. Therefore, players are left with two alternatives. A king who provides property rights protection ...