The recent global financial crisis has shaken the confidence of developed and developing countries alike in the very blueprint of financial and macro policies that underlie the western capitalist systems. In an effort to contain the crisis from spreading, the authorities in the US and many...

Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a...

Foreign direct investment (FDI) flows to developing countries surged in the 1990s to become their leading source of external financing. This rise in FDI volume was accompanied by a marked change in its composition: investment taking the form of acquisition of existing assets (mergers and...

This paper explores empirically the role of risk and return in the observed evolution of net foreign asset positions of industrial and developing economies. The paper adopts a dynamic approach in which investors' portfolios adjust gradually to their long-run equilibrium, defined by a standard...

Serven examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on...

A recent but rapidly growing empirical literature focuses on the relationship between public and private capital. But for the most part, it ignores the heterogeneity of public investment. In many countries, especially in the developing world, public investment includes not only basic...

Saving rates vary considerably across countries and over time. Policies that spur development are an indirect but effective way to raise private saving rates - which rise with the level and growth rate of real per capita income.Loayza, Schmidt-Hebbel, and Serveacute;n investigate the policy and...

Albuquerque, Loayza, and Serven analyze the unparalleled increase in foreign direct investment to emerging market economies in the past 25 years. Using a large cross-country timeseries data set, the authors evaluate the dependence of foreign direct investment on global factors or worldwide...

We examine how well several institutional and firm-level factors explain firms' perceptions of property rights protection. Our sample includes private and public firms which vary in size from very small to large in 80 countries. Together, the institutional theories we investigate account for...

This paper investigates the factors that determine a country's decision to adopt explicit deposit insurance using data on 170 countries over the 1960-2003 period. Specifically, we focus on the role played by outside influences and internal political factors both in adopting deposit insurance and...