The authors analyze the comparative macroeconomic performance of the Bretton Woods System of pegged exchange rates and the post-Bretton Woods float. The change in volatility of prices and output following the shift to floating does not appear to have been associated with differences in...

An empirical model of the relationship between financial deregulation and household saving is developed and estimated using regional data for the United Kingdom. Financial deregulation is found to be associated with a rise in the sensitivity of household saving to wealth, income, and the real...

This paper looks at theoretical and empirical issues associated with the operation of fiscal stabilizers within an economy. It argues that such stabilizers operate most effectively at a national, rather than local, level. As differing cycles across regions tend to offset each other for the...

Why do governments find it so difficult to move from pegged exchange rates to greater exchange rate flexibility? The author first establishes that there is a problem to be solved: that there are powerful incentives for greater flexibility deriving from changes in the international economic and...

This paper studies the effect of foreign aid on economic stabilization. Following Alberto Alesina and Allan Drazen (1991), the authors model the delay in stabilizing as the result of a distributional struggle. Since the delay is used to signal each faction's strength, the effect of the transfer...

We compare launch spreads on emerging-market bonds subject to UK governing law, which typically include collective action clauses, with spreads on bonds subject to US law, which do not. Collective-action clauses reduce the cost of borrowing for more creditworthy issuers, who appear to benefit...