The central aim of this dissertation is to make an unambiguous international trade policy recommendation for developing countries grounded on rigorous economic theory. As is generally known, trade models featuring increasing returns to scale and imperfect competition have challenged the mainstream case for free trade which is built upon unrealistic assumptions like constant return to scale and perfect competition. In this context, the core contribution of this dissertation is the restatement of the original free-trade case made by the classical political economists Adam Smith and David Ricardo. This restatement is based on the accurate interpretation of Ricardo's famous numerical example in chapter 7 of the Principles. The classical case for free trade formulated by Smith and Ricardo neither relies on unrealistic assumptions nor the laissez-faire doctrine. On the contrary, it stipulates that free trade should always be accompanied by public policies that expand the provision of public education, job training, health care and infrastructure. Moreover, a widespread policy change towards free trade should always be implemented gradually, in order to take care of those groups who might be affected in the short run by the increased level of international competition and technological progress. The main conclusion of the dissertation is that free trade - as conceived by classical political economy - is the most suitable international trade policy for developed as well developing countries for achieving sustainable economic growth and development. (author's abstract)

This paper presents new empirical evidence on the determinants of corruption, focussing on the role of globalization and inequality. The estimates for a panel of 102 countries over the period 1995-2005 point to three main results: i) Detection technologies, reflected in a high level of development, human capital, and political rights reduce corruption, whereas natural resource rents increase corruption. ii) Globalization (in terms of both trade and financial openness) has a negative effect on corruption, which is more pronounced in developing countries. iii) Inequality increases corruption, and once the role of inequality is accounted for, the impact of globalization on corruption is halved. In line with recent theory, this suggests that globalization - besides reducing corruption through enhanced competition - affects corruption also by reducing inequality. / Series: Department of Economics Working Paper Series

In this study we provide novel results on the extent of international trade synchronization during periods of trade collapses and US recessions. Based on monthly data for the G7 economies over the period 1961-2011, our results suggest rather idiosyncratic patterns of international trade synchronization during trade collapses and US recessions. During the great recession of 2007-2009, however, international trade experienced the most sudden, severe and globally synchronized collapse. (author's abstract) / Series: Department of Economics Working Paper Series