Ethnic divisions are associated with poor economic performance. This paper develops a model of ethnic conflict and finds that it is a significant source of poverty. Ethnic divisions lead the government to make ethnic transfers, which distort investment decisions, and lead to civil war because...

U.S. investors abroad receive a higher return on their assets than their counterparts that invest in the United States. I examine the degree to which excluding intangible assets and repatriation taxes from the international transactions accounts can account for this gap. Using a growth...