in The Quarterly Journal of Economics
May 2011; p ublished online June 2011 .
Journal Article. Subjects: International Factor Movements and International Business; Economic Growth and Aggregate Productivity; International Finance; Capitalist Systems; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; Macroeconomic Aspects of International Trade and Finance. 15695 words.
We propose a tractable variant of the open economy neoclassical growth model that emphasizes political economy and contracting frictions. The political economy frictions involve a...