The finding of Feldstein and Horioka (1980) that domestic saving and domestic investment are highly correlated across countries despite the rapid globalization and liberalization of financial markets in recent decades has been regarded as a Puzzle or Paradox. However, in this paper, we show that...

A Real Business Cycle model of the UK is developed to account for the behaviour of UK nonstationary macro data. The model, when tested by the method of indirect inference, can explain the behaviour of main variables (GDP, real exchange rate, real interest rate). We use it to explain how 'crisis'...

G-Cubed is a multi-country, multi-sector, intertemporal general equilibrium model that has been used to study a variety of policies in the areas of environmental regulation, tax reform, monetary and fiscal policy, and international trade. It is designed to bridge the gaps between three areas of...

At the core of the formation of the European Union (EU) in 1993 was the economic goal to create a European Common Market to ensure freer trade and perhaps to create an egalitarian Europe. The post-1993 period saw the biggest enlargement of the EU to date from a meagre 3 member countries...

This chapter suggests a rationale for a simple, scalable, and fast computational approach through the ‘Data With Direction Specification’ (DWDS) to supplement the implementation of the African Continental Free Trade Area (AfCFTA). The specification provides a way for digitally executable...

Bolivia has achieved noteworthy success over the past 15 years in raising incomes, reducing poverty, and maintaining macroeconomic stability by deploying commodity revenues to finance transfers, public investment, and state-led development, using an exchange rate peg as a policy anchor. However,...

The purpose of this paper is to explain the reluctance of developing countries to open up their capital market to foreigners, and the conditions inducing an emerging market economy to switch its policies. We consider an economy characterized initially by a one-sided openness to the capital...

We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality, and trade openness appear to help...

In this paper, we examine theoretically how corporate saving in emerging markets is contributing to global rebalancing. We consider a two-country dynamic general equilibrium model, based on Bacchetta and Benhima (2014), with a Developed and an Emerging country. Firms need to save in liquid...