We find that an expansion of credit has a positive effect on per capita output growth only up to a point. Beyond this threshold the impact of finance on growth is not statistically significant anymore. We show, however, that the estimated non-linear relationship may stem from the omission of...

Consistent with recent theoretical models, this paper finds that financial openness has a positive effect on private credit in economies characterized by a competitive banking sector, but that this effect vanishes and even becomes negative in economies with imperfect banking competition.

In countries where the government is the major recipient of bank lending, public debt is likely to harm financial development. Moreover, the lower the financial depth, the greater the adverse effects of public borrowing on financial development and macroeconomic outcomes.

We estimate a behavioural model of household’s remittances to investigate to what extent the level of financial development in the home country affects decisions on whether and how much to remit.

The effects of monetary policy vary significantly across countries. In particular, recent empirical work finds evidence of a Tobin effect in high income countries and a reverse Tobin effect in less developed economies. We present a neoclassical growth model where money is required for investment...

We estimate the impact of bank credit to the private sector on corruption, using indicators of a country’s legal origin as instrumental variables to assess causality. We find that bank credit to the private sector reduces corruption, with the result robust to instrumenting for bank credit and...

We reconcile theory and evidence on the relationship between economic prosperity and population growth in an R&D-based growth model. We show that the negative effect of population growth outweighs the positive effect in industrialized countries with well-developed public education sectors.

Abstract This study presents results of the validation of an ultra-short survey measure of patience included in the German Socio-Economic Panel (SOEP). Survey responses predict intertemporal choice behavior in incentive-compatible decisions in a representative sample of the German adult population.

We observe that identification of the discount rate from experimental data requires an assumption about the consumption period, the length of time over which a payment will be turned into utility-providing consumption. We show that the optimal consumption period is substantially longer than...

We test the implications of ambiguity aversion in a principal–agent problem with multiple agents. Models of ambiguity aversion suggest that, under ambiguity, comparative compensation schemes may become more attractive than independent wage contracts. We test this by presenting agents with a...