By specifying borrowing costs to increase with the debt to equity ratio we generate procyclical debt flows in response to terms of trade shocks, consistent with empirical evidence. Since procyclical capital flows attract unsustainably large capital inflows during favorable shocks and force...

The literature on Foreign Direct Investment (FDI) determinants is remarkably diverse in terms of competing theories and empirical results. We utilize Bayesian Model Averaging (BMA) to resolve the model uncertainty that surrounds the validity of the competing FDI theories. Since the structure of...

While intellectual property rights (IPRs) are the key drivers of economic performance in R&D based growth models, they have not been fully explored in empirical development studies. We introduce IPRs to this literature, using Two-Stage Least Squares Bayesian Model Averaging to address...

Investments in Information and Communication Technology (ICT) are the source of the global growth resurgence that commenced in the mid-1990s. Most studies focus on broad ICT measures, or on computer hardware; here we examine the contributions of software-intensive industries to productivity...

Documenting the long term impact of structural policies on economic performance has generated tremendous interest in the development literature. In contrast, contemporary effects of structural policies are difficult to establish. Structural policies seldom change sufficiently in the short run,...