This paper analyzes the effects of fiscal policy in an open economy. We extend the savers-spenders theory of Mankiw (2000) to a small open economy with endogenous labor supply. We first show how the Dornbusch (1983) consumption-based real interest rate for open economies is modified when labor...

I argue that whether or not a state is "predatory" hinges on the relationship between development and the distribution of political power in society. Development is typically inconsistent with the preservation of the political status quo and this gives those who initially hold political power an...