In this paper, we formalize the idea of human capital as the ability to follow and enforce the rules necessary for orderly conduct of economic transactions. People in the US and other developed countries stand in lines while waiting for the bus, etc., while in many developing countries lines...

In this paper we provide an explicit characterization of the escape dynamics for the Phellps problem of government controlling inflation with adaptive learning of the approximate Phillips curve, alternative to the one considered by Cho, Williams and Sargent (2002) (CWS in sequel). Our approach...

In this paper, we set out the JEM (Japanese Economic Model), a large macroeconomic model of the Japanese Economy. Although the JEM is a theoretical model designed with a view to overcoming the Lucas (1976) critique of traditional large macroeconomic models, it can also be used for both...

The inability of a wide array of dynamic stochastic general equilibrium (DSGE) models to generate fluctuations that resemble actual business cycles has lead to the use of habit formation in consumption. For example, habit formation has been shown to help explain the negative response of labour...

Most Latin American countries experienced their last peak in output per capita relative to the United States’ between 1971 and 1982. Prior to this peak per capita output was rapidly catching up to the developed world. Twenty years after the peak the average country’s relative per...

This study contains evidence on the importance of chronic disease burden on human-capital and fertility decisions in developing regions. The episode analyzed is the eradication of hookworm disease in the American South (c. 1910). In previous work (Bleakley 2002), it was shown that the hookworm...

Esteban and Ray (Econometrica 1994) describe a measure of polarization that is closely connected to potential conflict or tension in a society, emphasizing the difference between polarization and inequality. In principle a very highly polarized society may have a low level of inequality...

How do the liquidity functions of banks affect investment and growth at different stages of economic development? How do financial fragility and the costs of banking crises evolve with the level of wealth of countries? We analyze these issues using an overlapping generations growth model where...

This paper studies the costs and benefits of a mixed educational regime in which tax-financed public schools and tuition-financed private schools coexist. In the model, households are not allowed to borrow for education, but have a choice to educate their children in a public or a private...

In this study, we look at the relationship between export stability, investment and economic growth in nine Asian countries using time series data. The few previous time series studies in this area have not paid any attention to stationarity and cointegration issues. We find that in most cases,...