Why are some peoples still poor? Recent research suggests that a society’s “genetic distance”—a measure of the time elapsed since two populations had common ancestry—to the United States is a significant predictor of development even after controlling for an ostensibly exhaustive list...

Commonly used trade-weighted real exchange rate indices are computed as indices-of-indices, and thus do not adequately account for growth in trade with developing countries. Weighted Average Relative Price (WARP) indices solve this problem but do not control for productivity differences, as...

Why are some societies still poor? Recent research suggests that a country’s “genetic distance”—a measure of the time elapsed since two populations had common ancestry—from the United States is a significant predictor of development even after controlling for an ostensibly exhaustive...

Not only are investors biased toward home assets, but when they do invest abroad, they appear to favor countries with returns more correlated with home assets. Often attributed to a preference for familiarity, this ‘correlation puzzle’ further reduces effective diversification. However, a...

We investigate the effect of trade integration on interstate military conflict. Our empirical analysis, based on a large panel data set of 243,225 country-pair observations from 1950 to 2000, confirms that an increase in bilateral trade interdependence significantly promotes peace. It also...

Why are some peoples still poor? Recent research suggests the possibility that some societies may be poor due to their genetic endowments, which are found to be a significant predictor of development even after controlling for an ostensibly exhaustive list of geographic and cultural variables....

The massive stocks of foreign exchange reserves, mostly held in the form of U.S. T-Bonds by emerging economies, are still an important puzzle. Why do emerging economies continue to willingly loan to the United States despite the low rates of return? We propose that a dynamic general equilibrium...

This paper investigates nonlinear effects of government debt on private consumption. The estimated consumption function shows smooth regime switching depending on the debt-to-GDP ratio, and a higher level of government debt crowds out private consumption to a greater extent.

We extend Portes et al. (2001) by introducing the Internet as a variable, and we test the model empirically by using cross-country panel data on portfolio flows between the United States and other countries from 1990 to 2008. Asymmetric information accounts for the strong negative relationship...