Numerous econometric studies fail to detect a significant and robust relationship between international aid and economic growth in the recipient countries. Dutch Disease effects might be responsible for this result. This paper examines the relation between aid and its effectiveness in a...

By connecting the North–South diffusion and the bias of non-scale technological knowledge and by considering endogenous human capital, we relate the technological-knowledge diffusion with levels, inter-country gaps, growth rates, wage-inequality paths and specialisation patterns. Inter-country...

We employ simulation based inference to investigate the causal relationship between foreign direct investment and gross domestic product in China for the 1982–2008 period, both in a bivariate and a multivariate framework. Our maximum entropy bootstrap based approach, which avoids pre-test...

This study investigates the effect of terms of trade on economic growth of India by using the annual time series data from the period of 1980 to 2010. The ARDL bound testing cointegration confirms the significant positive relationship between terms of trade and economic growth in the long run as...

Price and liquidity puzzles have been identified as two major counterintuitive findings arising from monetary shocks. We investigate their presence in eleven African countries, using a dynamic stochastic general equilibrium model designed for indebted small open-economies. Our simulations reveal...

In this paper, we examine the empirical relationship between current account balance and output volatility in a panel data framework using annual data from 185 countries over the period from 1950 to 2010. In our static panel data analysis, we find that a larger current account deficit is...

An extensive literature stresses that currency misalignments are costly in terms of growth performance. However, these studies do not consider the direct and indirect effects of currency misalignments on other countries. In this paper, we analyze how misalignments of the dollar, the euro, and...

This paper investigates the impact of foreign aid, external debt and governance on the economic growth by extending the Ramsey–Cass–Koopman's growth model in an open economy framework. Steady-state and short run analysis shows that external debt and foreign aid do not affect the growth rate...

How big a boost to long run growth can countries expect from the ICT revolution? I use the results of growth accounting and the insights from a two-sector growth model to answer this question. A two-sector rather than a one-sector model is required because of the very rapid rate at which the...

In this paper, to investigate how an increase in the price of natural resources affects the level of technology, we develop an endogenous variety expansion model of a small open economy based on that of Grossman and Helpman (1991, Ch. 3). We conclude that an increase in the price of natural...