Category Archives: IFDP Paper

IFDP 2017-1210: Efficient Public Good Provision in Networks: Revisiting the Lindahl Solution

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Anil Jain | The provision of public goods in developing countries is a central challenge. This paper studies a model where each agent’s effort provides heterogeneous benefits to the others, inducing a network of opportunities for favor-trading. We focus on a classical efficient benchmark – the Lindahl solution – that can be derived from a bargaining game. Does the optimistic assumption that agents use an efficient mechanism (rather than succumbing to the tragedy of the commons) imply incentives for efficient investment in the technology that is used to produce the public goods? To show that the answer is no in general, we give comparative statics of the Lindahl solution which have natural network interpretations. We then suggest some welfare-improving interventions.

IFDP 2017-1209: Interest Rate Volatility and Sudden Stops: An Empirical Investigation

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Ricardo Reyes-Heroles and Gabriel Tenorio | Using a multi-country regime-switching vector autoregressive (VAR) model we document the existence of two regimes in the volatility of interest rates at which emerging economies borrow from international fina…

IFDP 2017-1208: China’s Current Account: External Rebalancing or Capital Flight?

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Anna Wong | This paper examines an anomaly in China’s current account: its large and rapidly growing travel expenditure. Drawing evidence from counterparty data, Chinese international arrival statistics, and gravity equation models extended to travel t…

IFDP 2017-1207: Goods-Market Frictions and International Trade

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Pawel M. Krolikowski and Andrew H. McCallum | We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time cons…

IFDP 2017-1207: Goods-Market Frictions and International Trade

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Pawel M. Krolikowski and Andrew H. McCallum | We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time cons…

IFDP 2017-1207: Goods-Market Frictions and International Trade

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Pawel M. Krolikowski and Andrew H. McCallum | We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time cons…

IFDP 2017-1207: Goods-Market Frictions and International Trade

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Pawel M. Krolikowski and Andrew H. McCallum | We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time cons…

IFDP 2017-1207: Goods-Market Frictions and International Trade

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Pawel M. Krolikowski and Andrew H. McCallum | We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time cons…

IFDP 2017-1206: Comparative Advantage in Innovation and Production

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Mariano Somale | This paper develops a multi-country, general equilibrium, semi endogenous growth model of innovation and trade in which specialization in innovation and production are jointly determined. The distinctive element of the model is the abi…

IFDP 2017-1206: Comparative Advantage in Innovation and Production

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Mariano Somale | This paper develops a multi-country, general equilibrium, semi endogenous growth model of innovation and trade in which specialization in innovation and production are jointly determined. The distinctive element of the model is the abi…