Instrumental variable methods are widely used to make inferences about the impact of some variable on economic outcomes; for example, whether or not institutions influence long term growth. However, the test-statistics used for making these inferences are based on the generally unrealistic...

Valid instrumental variables must be relevant and exogenous. However, in practice it is difficult to find instruments that are exogenous in that they satisfy the knife-edged orthogonality condition and at the same time are strongly correlated with the endogenous regressors. In this paper we show...

This paper analyzes the drivers and consequences of sudden stops of capital flows. It focuses on the impact of external vulnerability on the depth and length of sudden stop crises. The authors analyze 43 developing and developed countries between 1993 and 2006. They find evidence that external...

In pursuit of its transition from a command to a market economy, post-Soviet Russia has witnessed enormous regional differences in economic growth rates. Moreover, the economic reforms implemented under this transition, while initiated at the federal level, have also differed markedly across...

This paper models the return series of USD/CNY exchange rate by considering the conditional mean and conditional volatility simultaneously. An index type functional-coefficient model is adopted to model the conditional mean part and a GARCH type model with a policy dummy variable is applied to...