A considerable literature has focused on the determinants of total factor productivity (TFP), prompted by the empirical finding that TFP accounts for the bulk of long-term growth. This paper offers a deeper reason for such focus: the welfare of a representative consumer is summarized by current...

The financial crisis of 2007/2008, the subsequent great recession in rich countries and its propagation to developing countries has sparked a renewed interest in the role of fiscal policy as a potential countercyclical tool among policymakers and researchers. This paper reviews the state of...

The recent global financial crisis has shaken the confidence of industrial and developing countries alike in the very blueprint of the financial and macropolicies that underlie the Western capitalist systems. In an effort to contain the crisis from spreading, the authorities in the United States...

Over the 1990s macroeconomic policies improved in most developing countries, but the growth dividend from this improvement fell short of expectations, and a policy agenda focused on stability turned out to be associated with a multiplicity of financial crises. This article examines the contents...

This paper studies the transmission of business cycle fluctuations for developed (N ) to developing economies (S ) with a two-country, asymmetric, DSGE model with endogenous development of new technologies in N, and sunk costs of exporting and transferring the production of the intermediate...

For reasons of empirical tractability, analysis of cointegrated economic time series is often developed in a partial setting, in which a subset of variables is explicitly modelled conditional on the rest. This approach yields valid inference only if the conditioning variables are weakly...

Empirical evidence - including the current global crisis - suggests that shocks from advanced countries often have a disproportionate effect on developing economies. Can this account for the fact that aggregate fluctuations are larger and more persistent in the latter than in the former...

This paper shows that the welfare of a country's representative consumer can be measured using just two variables: current and future total factor productivity and the capital stock per capita. These variables suffice to calculate welfare changes within a country, as well as welfare differences...

Currency risk is one of the two components of the total interest rate differential. Hard pegs, such as currency boards, are meant to reduce or even eliminate currency risk, thus, reducing domestic interest rates. This paper investigates the patterns and determinants of the currency risk premium...

The North American Free Trade Agreement (NAFTA) is arguably the first case study of what may be expected from the increasing number of preferential trade agreements involving both developed and developing economies. Ten years after the treaty's inception, it is time to assess how its outcomes...