The authors study the endogenous determination of financial and trade openness. They construct a theoretical framework leading to two-way feedbacks between financial and trade openness and identify these feedbacks empirically. They find that one standard deviation increase in commercial openness...

Recent empirical studies reveal that effectiveness of aid on growth is ambiguous. The authors consider aid proliferation-excess aid investment relative to recurrent cost-as a potential cause that undermines aid effectiveness, because aid projects can only produce sustainable benefits when...

It is widely held that foreign direct investment (FDI) has a positive effect on economic growth. To test this hypothesis, we perform convergence regressions derived from a theoretical model on the impact of FDI on endogenous technological change in small economies. The model includes FDI...

The author applies the theory of the soft budget constraint to explain some stylized facts regarding the outcomes and practice of international aid, including ineffectiveness, white elephants, and volatility. The soft budget constraint can also make aid counterproductive. Nonetheless, actual aid...

The interaction between increased Southern trade integration (globalization) and labor market frictions is analyzed in a dynamic general-equilibrium North-South nonscale growth model with endogenous Northern innovation and endogenous Southern imitation. The qualitative employment, growth, and...

The authors study a temporary exchange-rate based stabilization plan in which agents face a sudden stop of capital inflows. The model generates a rising path of real interest rates in advance of the exchange rate collapse. This generates a time-dependent non-monotonic path of required premium on...

We use a very general bivariate GARCH-M model and quarterly data for five Asian countries to test for the impact of real and nominal macroeconomic uncertainty on inflation and output growth. We conclude the following. First, in the majority of countries uncertainty regarding the output growth...

The authors find that attitudes towards women are more progressive as per capita income rises and that the quality and quantity of women's human capital increases with per capita income. Prior to presenting these empirical results, the authors first demonstrate the importance of these...

This paper considers a two-country, three-good economy in which one country imposes tariffs on import goods at a uniform rate, while the other country engages in free trade. In such an economy, we examine the welfare effects of changing tariff rates toward differential tariffs from uniform...

The end of the Multifiber Agreement in January, 2005 had a negative impact on the apparel industry of regional exporters, but the effects were weaker than expected. Using a dynamic general equilibrium model, the article provides a prospective assessment of the impact on Tunisia of the phase out...