This paper addresses two puzzles of the growth literature: the failure of standard growth equations to account for slow growth in Latin America and Africa; and the surprising failure of trade to explain growth when trade liberalization appears to play a significant role. The paper shows that: i)...

Commodity prices are usually very slow to recover from adverse shocks. This is one of the reasons why it has proven so difficult either to smooth their effect or to stabilize them, and why it is sometimes argued that they should behave as if shocks were permanent. There is no reason however why...