Wealth effects and cross-country co-movement of labor

This paper quantitatively shows that the wealth effect on leisure plays a determining role in generating negative co-movement of employment across countries. Hence, even without restrictions on international capital mobility, a positive cross-country correlation of labor can be obtained by simply incorporating into standard models preferences that rule out the wealth effect.International Business Cycles, Wealth Effects, GHH Preferences

Liability dollarization and fear of floating

This paper explores the idea that fear of floating can be justified as an optimal discretionary monetary policy in a dollarized emerging economy. Specifically, I consider a small open economy in which intermediate goods importers borrow in foreign currency and face a credit constraint. In this economy, exchange rate depreciation not only worsens importers' net-worth but also increases the financing amount in domestic currency, therefore exaggerating their borrowing finance premium. Besides, because of high exchange rate pass-through into import prices, fluctuations in the exchange rate also have strong impacts on domestic prices and production. These effects, together, magnify the macroeconomic consequences of the floating exchange rate policy in response to external shocks. The paper shows that the floating exchange rate regime is dominated by the fixed exchange rate regime in the role of cushioning shocks and in welfare terms.Developing countries, Foreign exchange, Exchange control, Liability Dollarization, Fear of Floating, Imported Goods

Wiener criteria for existence of large solutions of quasilinear elliptic equations with absorption

We obtain sufficient conditions expressed in terms of Wiener type tests involving Hausdorff or Bessel capacities for the existence of large solutions to equations (1) -\Gd_pu+e^{\lambda u}+\beta=0 or (2) -\Gd_pu+\lambda |u|^{q-1}u+\beta=0 in a bounded domain \Gw when $q>p-1>0, \lambda>0$ and $\beta\in\mathbb{R}$. We apply our results to equations (3) -\Gd_pu+a\abs{\nabla u}^{q}+bu^{s}=0, (4) \Gd_p u+u^{-\gamma}=0 with $10, b\geq 0$ and $(q-p+1)+b(s-p+1)>0$, $\gamma>0$.Comment: To appear in Potential Analysi

Potential estimates and quasilinear parabolic equations with measure data

In this paper, we study the existence and regularity of the quasilinear parabolic equations: $$u_t-\text{div}(A(x,t,\nabla u))=B(u,\nabla u)+\mu$$ in $\mathbb{R}^{N+1}$, $\mathbb{R}^N\times(0,\infty)$ and a bounded domain $\Omega\times (0,T)\subset\mathbb{R}^{N+1}$. Here $N\geq 2$, the nonlinearity $A$ fulfills standard growth conditions and $B$ term is a continuous function and $\mu$ is a radon measure. Our first task is to establish the existence results with $B(u,\nabla u)=\pm|u|^{q-1}u$, for $q>1$. We next obtain global weighted-Lorentz, Lorentz-Morrey and Capacitary estimates on gradient of solutions with $B\equiv 0$, under minimal conditions on the boundary of domain and on nonlinearity $A$. Finally, due to these estimates, we solve the existence problems with $B(u,\nabla u)=|\nabla u|^q$ for $q>1$.Comment: 120