The paper focuses on two alternative concepts of sustainability dominating the literature: (i) maximum permanently maintainable consumption level (Fisherian income) and (ii) the amount of consumption that leaves total value of wealth intact (Hicksian income). In the context of a pure exhaustible...

Most governments issue and maintain a national money stock. Their reasons for doing so include national identity, deficit finance, and policy independence. Against this background, the authors examine agents' attachment to national currencies as revealed in the pattern of currency holding across...

The emerging market crises of the past decade have led some observers to question the wisdom of a completely open capital account. But even if capital controls are desirable, empirical evidence is needed to demonstrate when and under what circumstances restrictions are effective. This paper...

Panel data often provide an understanding of household behavior not possible with cross-sectional information alone. However, a disturbing feature of such data is that there can be substantial, nonrandom attrition and many analysts share the concern that this inhibits the ability to make...

Before the crisis of 1997/98, the East Asian economies-except for Japan but including China-pegged their currencies to the US dollar. To avoid further turmoil, the IMF argues that these currencies should float more freely. However, the authors' econometric estimations show that the dollar's...

The productivity bias hypothesis states that a relatively more productive country should experience a real appreciation of its currency. Most studies in the literature that have tested the hypothesis have employed cross-sectional data. Only a few studies have used time-series data and they have...

The paper is concerned with the issue of the most cost-effective way of improving access to education for poor households in developing countries. The authors consider two alternatives: extensive expansion of the school system (i.e., bringing education to the poor), and subsidizing investment in...

The paper presents an endogenous growth model where the level of international transaction costs may be decisive for whether the relatively poor East specializes in agriculture production, imitates goods from the rich West, or makes its own innovations. The author shows that the East produces...

The paper examines the effect of inequality on growth among the subnational states in India. Theoretically, growth of the regional economy is driven by productive public investment in the provision of health and education services financed by a linear output tax, and the optimum tax rate is...

Resource degradation poses problems in many developing countries. In the model presented in the paper, current agricultural production lowers future land productivity. Since agents must produce to meet current subsistence needs, this can lead to a poverty trap in which land quality is...