We test the relationship between governance and macroeconomic technical efficiency on a sample of 62 countries, both developed and developing. We do so by applying Battese and Coelli (1995)’s method at the aggregate level. We find that better governance, measured by six complementary indices...

This paper tests whether social trust affects total factor productivity (TFP). Using both development and growth accounting, we find strong evidence of a causal positive effect of social trust on the level and growth of TFP. We moreover observe that the effect of social trust on TFP runs through...

This paper aims at discovering the decision rule the Governing Council of the ECB uses to set interest rates. We construct a Taylor rule for each member of the council and for the euro area as a whole, and aggregate the interest rates they produce using several classes of decision-making...

We report evidence that trust is the missing root relating education, institutions, and economic development. We observe that more trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with a...

This paper assesses the relationship between institutions, output, and productivity when official output is corrected for the size of the shadow economy. Our results confirm the usual positive impact of institutional quality on official output and total factor productivity, and its negative...

type="main" <title type="main">Summary</title> <p>We investigate the impact of investment on growth in a sample of 85 developed and developing countries over 1984–2009, conditioning the marginal effect of investment on institutional quality. The panel structure of our dataset allows controlling for unobserved heterogeneity...</p>

This note reconsiders the results obtained by Matsen and Røisland [Eur. J. Political Economy 21 (2005) 365-384] by dropping the simplifying assumption that the median of country-specific shocks is equal to their mean. Majority voting then increases the volatility of the chosen interest rate...

This note studies the volatility of the policy chosen by a committee whose members’ preferences are volatile, due to common and individual preferences shocks. It is shown that majority voting mitigates the latter but not the former. The volatility of the policy is smaller the smaller the...

This article studies the connection between political instability and the sustainability of an exchange rate regime. A model based on the credibility of monetary policy shows that political unrest should be correlated with the adoption of flexible exchange rates. That intuition is tested using...