This paper updates and extends the work of Barro (2000). International data confirm the presence of the Kuznets curve-an inverse-U shape relationship between income inequality and per capita GDP-that is relatively stable from the 1960s into the 2000s. The direct effect of international openness...

"A representative-consumer model with Epstein-Zin-Weil preferences and i.i.d. shocks, including rare disasters, accords with key asset-pricing observations. If the coefficient of relative risk aversion equals 3-4, the model accords with observed equity premia and risk-free real interest rates....

The allowance for low-probability disasters, suggested by Rietz (1988), explains a lot of puzzles related to asset returns and consumption. These puzzles include the high equity premium, the low risk-free rate, the volatility of stock returns, and the low values of typical macro-econometric...

From the perspective of conditional convergence, China's GDP growth rate since 1990 has been surprisingly high. However, China cannot deviate forever from the global historical experience, and the per capita growth rate is likely to fall soon from around 8% per year to a range of 3 4%. China can...

Extremely low discount rates play a central role in the Stern Review's evaluation of environmental protection, and this assumption has been criticized by many economists. The Review also stresses that great uncertainty is a critical element for optimal environmental policies. An appropriate...

In an 80-country panel since the 1960s, the convergence rate for per capita GDP is around 1.7% per year. This "beta convergence" is conditional on an array of explanatory variables that hold constant countries' long-run characteristics. The introduction of country fixed effects generates a much...

A representative-consumer model with Epstein-Zin-Weil preferences and i.i.d. shocks, including rare disasters, accords with key asset-pricing observations. If the coefficient of relative risk aversion equals 3-4, the model accords with observed equity premia and risk-free real interest rates. If...

Satisfactory calculations of the welfare cost of aggregate consumption uncertainty require a framework that replicates major features of asset prices and returns, such as the high equity premium and low risk-free rate. A Lucas-tree model with rare but large disasters is such a framework. In a...

In 1997-98, five east Asian countries -- Indonesia, Malaysia, South Korea, the Philippines, and Thailand -- experienced sharp currency and banking crises. The contraction of real GDP was severe in relation to the previous history and in comparison with five east Asian countries that were less...