This article examines the effect of government consumption on economic growth in 23 Latin American countries over the years 1974-2003. Employing the Armey Curve, we show that the typical Latin American government is spending beyond the optimal point. Using panel data and a fixed effects (FE)...

Using quarterly data from 1973 to 2008, we provide evidence that current account (CA) deficits exceeding 4.2% of GDP (Mann's rule") do have a significant lowering effect on the U.S. dollar value against major currencies. Controlling for inflation, public debt, and a broad trade weighted index,...

This paper attempts to shed light on the question: What motivates China to invest so heavily in U.S. Treasury securities, despite the fact that U.S. Treasuries provide real rates of return that are either close to zero or negative? Such an investment strategy can be perceived as economically...

Examining monthly data from May of 1985 to May of 2008, we find that increases in Chinese purchases of U.S government debt lead to decreases in Treasury yields. The effect is stronger as the maturity increases: a one percent increase in purchases of U.S. Treasuries by Chinese investors lowers...