The 1994 crisis in Mexico, developments in East Asia, and persistent turmoil in world financial markets have dramatized the role of external imbalances in macroeconomic crises. Some believe that the current account should be kept from rising beyond a sustainable level, some that a current...

July 2000 - In developing countries, increases in current account deficits tend to be associated with a rise in domestic output growth and shocks that increase the terms of trade and cause the real exchange rate to appreciate. Higher savings rates, higher growth rates in industrial economies,...

This paper contributes to explain the cross-country heterogeneity of the poverty response to changes in economic growth. It does so by focusing on the structure of output growth. The paper presents a two-sector theoretical model that clarifies the mechanism through which the sectoral composition...

"Informality" is a term used to describe the collection of firms, workers, and activities that operate outside the legal and regulatory systems. It is widespread in the majority of developing countries-in a typical developing economy, the informal sector produces about 35 percent of gross...

This paper studies the trends and cycles of informal employment. It first presents a theoretical model where the size of informal employment is determined by the relative costs and benefits of informality and the distribution of workers' skills. In the long run, informal employment varies with...

This paper estimates the effect of income inequality on real gross domestic product per capita using a panel of 104 countries during the period 1970?2010. The empirical analysis addresses endogeneity issues by using instrumental variables estimation and controlling for country and time fixed...

We examine the relationship between domestic saving and the current account in developing countries. Our three main findings are that: (i) domestic saving has a small effect on the current account; (ii) domestic saving has a significant positive effect on the trade balance – this effect is...

Do populations grow as countries become richer? In this paper we estimate the effects on population growth of shocks to national income that are plausibly exogenous and unlikely to be driven by technological change. For a panel of over 139 countries spanning the period 1960-2007 we interact...