Using GMM estimation with the US data from January 1967 to April 2003, the precautionary saving hypothesis is tested using time-varying consumption uncertainty and a nonexpected-utility model of intertemporal optimal consumption. Overidentifying restrictions of the model specification are also...

The role of foreign direct investment (FDI) in the convergence of income level and growth has been investigated by panel data regressions. Bilateral FDI data from OECD from 1982 to 1997 is used. Income level and growth gaps between source and host countries turn out to decrease as bilateral FDI...