In this note we show that the real exchange rate was indeed weakly exogenous in some of the specifications in MacDonald and Ricci (2004), but argue this was in all likelihood a function of the relatively limited degrees of freedom. We demonstrate here that by increasing the degrees of freedom,...

We propose a theory of low-frequency movements in unemployment based on downward real wage rigidities. The theory generates two main predictions: long-run unemployment increases with (i) a fall in long-run productivity growth and (ii) a rise in the variance of productivity growth. Evidence based...

The availability of financial instruments related to indices that track global financial conditions and risk appetite can potentially offer countries alternative options to insure against external shocks. This paper shows that while these instruments can explain much of the in-sample variation...

This paper assesses the non linear impact of external debt on growth using panel data for 93 developing countries. The estimates support a non-linear, hump-shaped, relationship between debt and growth, especially when the debt burden is measured relative to GDP. For a country with average...

This paper uses a newly assembled multi-country multi-industry fi…rm-level dataset to test the effect of productivity and networking on the export probability of …firms. Results are in line with the new-new trade theory and with the literature on the information value of networks. Firms are...

In the presence of downward nominal wage rigidities, wage setters take into account the future consequences of their current wage choices, when facing both idiosyncratic and aggregate shocks. We derive a closed-form solution for a longrun Phillips curve which relates average output gap to...