This paper presents the theoretical underpinnings of the MSG2 simulation model of the world economy. The MSG2 model is a dynamic general equilibrium model of the world economy which pays particular attention to the relation between stocks and flows and intertemporal constraints. The formation of...

The volatility of the world economy since the breakdown of the Bretton Woods par value system of exchange rates has led many policymakers and economists to call for reform of the international monetary system. Many critics of the current "non-system" call for tighter international rules of the...

Most recent cross-country analyses of economic growth have neglected the importance of physical geography. This paper reviews the distinctive development challenges faced by economies situated in tropical climates. Using geographic information system (GIS) mapping, the paper presents evidence...

During the past five years, there has been an important debate over the differing styles of market reforms in the formerly planned economies in East Asia versus Eastern Europe and the former Soviet Union (EEFSU). This paper puts forward three related propositions. First, the rapid growth of East...

The central hypothesis of this paper is that high income inequality in Latin America contributes to intense political pressures for macroeconomic policies to raise the incomes of lower income groups, which in turn contributes to bad policy choices and weak economic performance. The paper looks...

This paper reviews the management of the debt crisis to date, and considers several possible alternative approaches for international cooperation in the future. The first part of the paper briefly reviews the scope of the crisis, and some of the reasons for its onset. Then, the paper describe...

The search for "growth-oriented adjustment programs" reflects a widespread malaise concerning IMF stabilization programs in countries suffering from external debt crises. A new orthodoxy is emerging from this search, which links recovery in the debtor countries to a shift to "outward-oriented"...

This essay examines some aspects of capital flows within the OECD, and outlines a framework for analyzing current account movements. In both the theoretical and empirical sections, I argue for the importance of including investment and growth in analyses of the current account. I present...

This paper provides a formal analysis of the current account balance in a dynamic model with optimizing agents. Two analytical ideas are stressed. First, an economy's current account balance depends as much on fixture economic trends as on the current economic environment. A shift in fiscal...

This paper offers a theoretical framework for studying the inter-actions of energy prices and economic growth. The incorporation of energy prices and quantities in a macroeconomic setting focuses on (1)the aggregate technology; (2) the interdependence of energy producers and consumers in the...