Using Chilean data, we document that for resource-rich small open economies the effects of terms of trade shocks on the wage gap (between skilled and unskilled workers) depend on factor intensities in the non-tradable sector, following the model in Galiani, Heymann, and Magud (2010). For a...

The purpose of this study is to identify conditions under which renewed international lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjustment and distorted credit markets affect the conditions for the...

Tax or debt financing of a given rate of government expenditures would, according to the now well-known Ricardian Equivalence proposition, have equivalent effects on aggregate demand. Among the reasons for a deviation from the equivalence is the possibility that the government and the private...

The dynamic responses of a developing economy to a variety of policy and external shocks are studied using an empirical macroeconomic model which embodies rational expectations, perfect capital mobility, and import rationing. These features, which are relatively new in developing-country...

The G-8 debt relief proposal, if adopted, should have little impact on the rational and operational aspects of the shocks window, but it may affect some of the financing consideratins, which are taken up in the page on "The G-8 Debt Cancellation Proposal and its Implications for the Fund