The paper tests three hypotheses concerning foreign equity investment in the presence of liquidity risk. First, the FDI-to-FPI price differential is negatively related to liquidity risk (the "Price Discount Hypothesis"). The idea is that market participants do not know whether the FDI investor...

This paper studies sharp reductions in current account deficits and large exchange rate depreciations in low- and middle-income countries. It examines which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance. It finds...

The link between happiness and overall inequality is best studied using an index that incorporates different aspects of inequality, and is measured consistently in different countries. One such index is the degree to which happiness itself varies among individuals. Its correlation with both...

This paper addresses how creditor protection affects the volatility of stock market prices. Credit protection reduces the probability of oscillations between binding and non-binding states of the credit constraint; thereby lowering the rate of return variance. We test this prediction of a...

We examine the choice between Foreign Direct Investment and Foreign Portfolio Investment at the level of the source country. Based on a theoretical model, we predict that (1) source countries with higher probability of aggregate liquidity crises export relatively more FPI than FDI, and (2) this...

This paper uses data for nineteen industrial countries over the period 1960-1985 to examine the evidence for international convergence of technical progress. Several models of convergence, including a model in which convergence is affected by changes in a country's openness to trade, are...

Strong versions of the set point hypothesis argue that subjective well-being measures reflect each individual's own personality and that deviations from that set point will tend to be short-lived, rendering them poor measures of the quality of life. International migration provides an excellent...