This paper investigates the relationship between financial development and firm size. The model shows that the efficiency of the financial system, measured by the level of monitoring costs, affects the extent of risk sharing within an economy and through this channel the availability of external...

Most of the literature on monetary policy delegation assumes that the government can credibly commit to the delegation contract, an assumption criticized by McCallum. This paper provides foundations for the assumption that renegotiating a delegation contract can be costly by illustrating how...

This paper shows that whether natural resources are good or bad for a country's development depends crucially on the interaction between institutional setting and the type of resources that the country possesses. Some natural resources are for economical and technical reasons more likely to...