This study demonstrates how constrained efficient allocations can arise endogenously as equilibria in an economy with a limited ability to enforce contracts and with private agents behaving competitively, taking a set of taxes as given. The taxes in this economy limit risk-sharing and arise in...

This article assesses the role of external and policy factors for growth variability. The mean group estimator is used to estimate a vector autoregressive system on a panel data set of eighteen developing economies from 1965 to 1992. The main findings are that (i) temporary external shocks are...