We analyze a two-country zone facing a joint inflationary shock and responding with coordinated and uncoordinated monetary and fiscal policies. We show that the standard presumption that the absence of coordination results in an excessive exchange rate appreciation of the zone with respect to...

I argue in this paper that the `speed of convergence' estimated in recent works on `convergence' does not capture `actual' convergence towards a steady state, but rather conditional dynamics towards a moving target. Although this conditional convergence can be taken to imply that there are...

The dynamic inconsistency of a government's preferred policy, when it occurs, usually implies that the maximum level of welfare that can be delivered at some initial time can only be attained by constraining the economy to `low' levels in the future. In this paper, we set up a linear quadratic...

During the XXth century, life expectancy levels have converged across the world. Yet, macroeconomic studies, as Acemoglu and Johnson (2007), estimate that improvements in health have no impact on growth or any factors of growth; in particular, they find no impact of life expectancy increases on...

Why do countries default? This seemingly simple question has yet to be adequately answered in the literature. Indeed, prevailing modelling strategies compel the to choose between two unappealing model features: depending on the cost of default selected by the modeler, either the debt ratios are...

This Paper presents a new set of data on human capital. It is constructed so as to stay as close as possible to the censuses compiled by national, OECD or UNESCO sources. We then use these data to test a model that embeds the Mincerian approach to human capital into the Mankiw, Romer and Weil...

We distinguish two attitudes towards debt. The attitude of prudent borrowers, which attempt to stabilize their debts to low levels, even in the event of a bad shock, and what we call, after Krugman, "Panglossian" borrowers, which only focus on the best of their growth prospects, and rationally...

We argue in this paper that cancelling the debt of the poorest countries was a good thing, but that it should not imply that the debt instrument should be foregone. We claim that debt and debt cancellations are indeed two complementary instruments which, if properly managed, perform better than...

The paper attempts to explain why single factor explanations of the poverty of nations are usually found to be unsatisfactory. Poor countries outside Africa, for instance, have an income per head which stands at about one third of the rich countries’ income per head. Yet each of the three...

We study all-pay contests in which there is a positive probability of a tied outcome. We analyse both one-stage contests and multi-stage contests with tie-breaks. We demonstrate that in symmetric two-player contests, the designer does not have an incentive to award a prize in a case of a tie....