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Working Paper
Trade policy for the multiple product declining industry
Increasing returns to scale and scope in production technology combined with product substitutability in demand yields an environment where free trade may not maximize domestic country welfare. If not, there is an optimal tax on imports that depends on the cross-elasticity of demand between the products in the spectrum and on the degree of economies of scale and scope in technology. However, even if protection may be warranted in the short run, the long run solution is consistent with the theory of comparative advantage.
Working Paper
Protection and retaliation: changing the rules of the game
An examination of the macroeconomic, political, and institutional environment of the 1930s and the 1980s suggests a set of stylized facts associated with periods of trade tension and incidents of trade retaliation. Periods of macroeconomic stress precipitate changes in the conduct of and implementation of U.S. trade policy, which then can lead to escalating trade tension, protectionist measures, and perhaps retaliation. Macroeconomic stress, especially when linked to external events, decreases the political benefits of following a liberal trade policy and changes the economic consequences of ...
Working Paper
Fiscal implications of the transition from planned to market economy
The transition from a centrally planned to a market-based economic system should change fundamentally the roles of government and public enterprises in the East-Central European countries of Hungary, Poland, and the Czech and Slovak Federated Republic (CSFR). The size of government should diminish, and that of the private sector increase, as subsidies, which are difficult to justify at market prices, are phased out. Taxes in centrally planned economies tend to be highly distortionary relative to those in market economies, making a restructuring of the tax system desirable to improve ...
Conference Paper
The U.S. external deficit: its causes and persistence
Journal Article
U.S. international transactions in 1993
Journal Article
Prices, profit margins, and exchange rates
Working Paper
The financial structure of startup firms: the role of assets, information, and entrepreneur characteristics
Using the Kauffman Firm Survey, we examine how characteristics of a startup's assets, information about the startup, and entrepreneur attributes relate to financial structure at inception. Startups with more physical assets or those where the entrepreneurs have other similar businesses are more likely to use external debt in the financial structure since these assets have a high liquidation value. Startups with human capital embodied in the entrepreneur or intellectual property assets have a lower probability of using debt, consistent with the higher asset specificity and lower collateral ...
Journal Article
This is Bangalore calling: hang up or speed dial? what technology-enabled international trade in services means for the U.S. economy and workforce
The U.S. service sector is in the midst of a transformation similar to the one undergone by the manufacturing sector. Some jobs are moving to other countries, some are disappearing, some are being born. But the service-sector transformation is likely to be different. Technological advances and globalization are making it possible, but these factors reinforce each other in such a way that the gains to the U.S. economy are likely to be greater than with manufacturing, and the transition costs more widespread. Thus, superior and better coordinated domestic and international policies are needed ...
Discussion Paper
Reviving mortgage securitization: lessons from the Brady Plan and duration analysis
We review the period of the Latin American debt crisis in order to draw policy analogies from that experience for current U.S. credit securitization markets. During the earlier episode the Brady Plan used a zero-coupon U.S. Treasury security to provide a credit enhancement for the troubled assets. This revitalized the market for Latin American debt by: (1) ameliorating the dual solvency problem that affected both creditors and debtors, and (2) revealing asset prices as dominated by risk fundamentals rather than by short-run factors. The cost of the Brady plan was quite small relative to its ...
Working Paper
Determinants of Japanese direct investment in U.S. manufacturing industries
The rapid rise in Japanese owned assets in the United States and the substantial fall of the dollar against the yen naturally raises the question of whether there is a causal relationship between Japanese direct investment and the yen/dollar exchange rate. ; This paper contributes in two ways to the analysis of the direct investment-exchange rate link. First, it presents a hybrid model of direct investment which incorporates insights from both portfolio balance models and industrial-organization-based models of direct investment. Second, it tests and compares these three models of direct ...