The aim of this paper is to analyze the impact of government spending on the private sector, assessing the existence of crowding-out versus crowding-in effects. Using a panel of 145 countries from 1960 to 2007, the results suggest that government spending produces important crowding-out effects,...

A big challenge for the economic development of small island countries is dealing with external shocks. The Pacific Islands are vulnerable to natural disasters, climate change, commodity price changes, and uncertain donor grants. The question that arises is how should small developing countries...

This paper explores the consequences of extremely low real interest rates in a world with integrated but heterogenous capital markets and nominal rigidities. We establish four main results: (i) Liquidity traps spread to the rest of the world through the current account, which we illustrate with...

The paper examines the crude oil price effects on the political environment of the top four crude oil-consuming countries. The study uses data from 2002 to 2017 to showcase the effect of crude oil price on political environment of crude oil-consuming countries. The study takes Voice and...

Rent extraction by capitalists is present if the capital income share exceeds the capital output elasticity. Based on a sample of 111 countries during the period 1970-2010, this paper provides estimates of the capital output elasticity and compares these to countries' capital income shares....

We construct representative firm-level longitudinal data for twenty-seven European countries using financial statements from the Orbis global database, providing a “how-to” guide on the construction. We validate our dataset by comparing its aggregate coverage to official statis- tics and...

We study the relationship between credit expansions, macroeconomic fluctuations, and financial crises using a novel database on the sectoral distribution of private credit for 117 countries since 1940. We document that, during credit booms, credit flows disproportionately to the non-tradable...

According to Acemoglu, Robinson and Johnson (2002), institutional divergence prior to the Industrial Revolution is the fundamental cause of differences in income levels across countries. To quantify the impact of institutions on long-run growth rates that drive the differences in levels, we...

Asia has emerged as the balancing wheel of global finance. The countries of Asia now account for 70 per cent of global foreign exchange reserves, compared to only 30 per cent in 1990 and 21 per cent in the early 1970s. This paper explores theoretical interpretations for the relatively high...

The importance of trade costs in segmenting product markets cannot be captured by considering aggregate prices or in the absence of information on the direction of trade. We address this problem by utilizing product-specific prices along with cross-sectional productivity measures and bilateral...