The authors argue that the recent Asian currency crisis was caused by large prospective fiscal deficits associated with implicit bailout guarantees to failing banking systems. They articulate this view using a simple dynamic general equilibrium model, whose key feature is that a speculative...

The authors revisit the relationship between aid and growth using a new data set focusing on the 1990s. The evidence supports the view that the impact of aid depends on the quality of state institutions and policies. The authors use an overall measure of institutions and policies popular in the...

The authors of this paper use a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth of per capita GDP. In panel growth regressions for 56 developing countries and 6 four-year periods (1970-93), they find that the policies that have a great...

Spurring growth in the developing world is one stated objective of foreign aid. Another, more commonly cited, objective is reducing poverty. Generally poverty reduction and growth go hand in hand, but could aid mitigate poverty without measurably affecting growth? The authors examine how foreign...

The author surveys recent growth models that try to explain the diversity among countries in rates of economic growth. The author finds that these models can generate differences in growth rates only in the absence of international capital markets. Under these models, if there were free...

The authors suggest that there are important opportunities to empirically evaluate the theoretically predicted channels from policy to growth. They propose a research agenda based on the endogenous growth literature, designed to address the questions: How do national policies affect long-run...

One of the central predictions of growth theory, old and new, is that income taxes have a negative effect on the pace of economic expansion. Little empirical work has been done on the topic because of the difficulty of measuring the relevant marginal tax rates. Easterly and Rebelo experiment...