"We quantify the role of financial frictions and the initial misallocation of resources in explaining development dynamics. Following a reform that triggers efficient reallocation of resources, our model economy with financial frictions converges slowly to the new steady state-it takes twice as...

Khan presents a theory of financial crises in the age of globalization from an evolutionary perspective and suggests policies that may be necessary for averting or managing new financial crises. Starting with the Asian financial crises, he identifies new types of financial crises that result...