This discussion paper led to an article in <I>Papers in Regional Science</I> (2014). Volume 93, Issue 2(SI).<P> The majority of cities in our world is not only connected through conventional physical infrastructure, but increasingly through modern digital infrastructure. This paper aims to test whether...</p></i>

This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce...

The business performance of firms in the creative high-tech sector shows much variation. This paper examines whether the geographical location of such business firms influences the performance of these firms. The overarching analysis framework of this paper emerges from the recently developed...

In standard macroeconomic models, debt sustainability and price level determinacy are achieved when fiscal policy avoids explosive debt and monetary policy controls inflation, irrespective of the relative strengths of each policy stance. We examine how these policy requirements for equilibrium...

This study examines the fungibility of foreign aid and makes three contributions to the existing literature. Firstly, fungibility of aid at the aggregate level is reexamined on a richer panel dataset of 91 developing countries for 1980-2009, taking into account endogeneity of aid and...

The most recent literature on aid effectiveness finds a positive effect of aid on growth. To the extent that aid goes through the budget, this either reflects an aid-financed increase in government expenditures (quantity effect) or an improvement in the use of government resources as a result of...

Keynesian theory predicts output responses upon a fiscal expansion in a small open economy to be larger under fixed than floating exchange rates. We analyse the effects of fiscal expansions using a New Keynesian model and find that the reverse holds in the presence of sovereign default risk. By...