We review the literature on Dutch disease, and document that shocks that trigger foreign exchange inflows (such as natural resource booms, surges in foreign aid, remittances, or capital inflows) appreciate the real exchange rate, generate factor reallocation, and reduce manufacturing output and...

Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components of investment. This paper sheds some light on this important issue by...

Poland stands out among transition economies as having experienced a relatively short and shallow contraction followed by sustained, vigorous growth. This paper examines various aspects of Poland’s growth performance from 1992 through 1998 at the macroeconomic level as well as across sectors...

This paper evaluates a fiscal scenario based on the assumption of a rapid scaling-up of expenditure to be followed by a rapid scaling-down in the context of Azerbaijan''s current temporary oil production boom. To this end, it relies on a review of historical precedents and a neoclassical growth...

This paper evaluates the performance of two alternative policy rules, a forward-looking rule and a spontaneous adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union data. The simulations suggest that forward-looking rules...

What accounts for variations in FDI flows from advanced to developing countries? How have FDI inflows explained cross-country growth experiences? In this paper we tackle both these questions empirically for a large sample of middle and low-income countries. Two key results emerge: (i) lower...

This paper investigates the impact of a global slowdown on individual African countries using a series of dynamic panel regressions for countries in the region, relating real growth in domestic output to world growth in trade weighted by partner countries and several control variables: oil...

This paper develops a model merging the monetary approach to the balance of payments and a neoclassical growth model into a unified framework in which inflation, growth, and the balance of payments are simultaneously determined. The empirical part of the paper presents estimates of the key...

This paper formulates a simple aggregate growth model that is capable of assessing the impact of macroeconomic policies on the long-term performance of a developing country. The model emphasizes expenditures on human capital and the dynamics of external debt, and yields empirically testable...