This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the...

Intro -- Contents -- I. INTRODUCTION -- II. EMPIRICAL EVIDENCE ON FOREIGN BANKS IN POOR COUNTRIES -- III. CREAM-SKIMMING EFFECTS OF FOREIGN BANK ENTRY: THEORY -- IV. THE EMPIRICAL TEST: METHODOLOGY AND DATA -- V. RESULTS FROM THE EMPIRICAL TESTS -- VI. CONCLUSIONS -- Appendix I. Welfare...

Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the...

This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the...

This paper studies how macroeconomic policies can help offset two unintended and undesirable features of foreign aid: its volatility and Dutch disease. We present evidence that aid volatility augments trade balance volatility and that foreign aid, with the important exception of years of adverse...

We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when foreign banks are better at monitoring highend customers than domestic banks, their entry benefits those customers but may hurt other customers and worsen welfare....