How hospitable will the global environment be for economic growth in the developing world as we come out of the present financial crisis? The answer depends on how well the author manage the following tension. On the one hand, global macro stability requires that we prevent external imbalances...

The volume consists of an overview and seven country studies, written by leading scholars from both developed and developing countries. The overview lays out a unifying framework for thinking about economic growth as a combination of two challenges. The “structural change challenge” is...

Greater interdependence is often taken to require more global governance, but the logic requires scrutiny. Cross-border spillovers do not always call for international rules. The canonical cases for global governance are based on two sets of circumstances: global commons and...

Despite the well known gains from trade, trade liberalization is one of the most politically contentious actions that a government can undertake. We propose and formalize a new explanation of this unpopularity. The explanation is based on uncertainty and is complementary to the usual...

This paper examines the interactions between household formation, inequality, and per capita income. We develop a model in which agents decide to become skilled or unskilled and form households. We show that the equilibrium sorting of spouses by skill type (their correlation in skills) is an...

This paper examines the properties of exams and markets as alternative allocation devices under borrowing constraints. Exams dominate markets in terms of matching efficiency. Whether aggregate consumption is greater under exams than under markets depends on the power of the exam technology; for...