Countries in Sub-Saharan Africa (SSA) tend to lag those in most other regions in terms of governance and perceptions of corruption. Weak governance undermines economic performance through various channels, including deficiencies in government functions and distortions to economic incentives. It...

We introduce a new suite of macroeconomic models that extend and complement the Debt, Investment, and Growth (DIG) model widely used at the IMF since 2012. The new DIG-Labor models feature segmented labor markets, efficiency wages and open unemployment, and an informal non-agricultural sector....

Using a production function method, this paper assesses the impact of the global crisis on the potential growth of Australia and New Zealand. The two countries have not been hit hard by the global crisis, but have large net external liabilities. The paper finds that the main negative impact of...

Simulations with the Fund’s GIMF model show that raising government savings in New Zealand permanently by 1 percent of GDP is likely to improve the current account balance by about 1⁄2 percent of GDP. The way government savings are achieved matters for GDP but little for the current account....

In this paper, the IMF''s new Global Economy Model (GEM) is used to estimate the contribution of unbalanced growth to the decline in the share of goods production in Australia and New Zealand. The simulation results suggest that faster productivity growth in the tradable goods sector in...

This paper examines the effects of demographic dynamics on the measured rates of economic growth. First, it develops a model of production with labor productivity that varies with age. Second, it uses macroeconomic and demographic data to estimate the relative productivity of different age...

This paper analyses the impact of government tax and subsidy policy on immigration of human capital and the effect of such immigration on growth and incomes. In the context of a two-country endogenous growth model with heterogeneous agents and human capital accumulation, we argue that human...

The present paper takes a fresh theoretical and empirical look into the relationship between Wagner’s law and economic development. It introduces human capital into a classic two-sector model of unbalanced growth. It shows that, as an economy develops, changes in the relative returns to human...