There is growing evidence that appropriate financial services have substantial benefits for consumers, especially women and poor adults. This paper provides an overview of financial inclusion around the world and reviews the recent empirical evidence on how the use of financial products -- such...

This paper documents the existence of a "middle-income trap" for the Middle East and North Africa region. It argues that the economic woes of the Middle East and North Africa offer new insights into the debate on the trap which has thus far focused on the East Asia and Pacific region. The...

This paper examines how the ability to access long-term debt affects firm-level growth volatility. The analysis finds that firms in industries with stronger preference to use long-term finance relative to short-term finance experience lower growth volatility in countries with better-developed...

This paper examines whether domestic output growth helps attract capital inflows and, in turn, capital inflows help boost output growth in a set of 38 Sub-Saharan African countries. Using a two-step approach to address reverse causality and omitted variable issues, the paper finds that output...

This paper provides empirical evidence on firm recoveries from financial system collapses in developing countries (systemic sudden stops episodes), and compares them with the experience in the United States in the 2008 financial crisis. Prior research found that economies recover from systemic...

This paper surveys the academic and policy debate on the roots of global imbalances, their role in the inception of the global crisis, and their prospects in its aftermath. The conventional view holds that global imbalances result primarily from unsustainably high demand for goods in the United...

This paper investigates the contribution of small firms to employment, job creation, and growth in developing countries. While small firms (20 employees) have the smallest share of aggregate employment, the SME sector's (100 employees) contribution is comparable to that of large firms. Small...

The reallocation of resources from low- to high-productivity firms can generate large aggregate productivity gains. The paper uses data from the Malaysian manufacturing census to measure the country's hypothetical productivity gains when moving toward the level of within-sector allocative...

Public debt in developing economies rose at a fast clip during 2020-21, at least partly due to the onset of the global Covid-19 pandemic. Nobel laureate Paul Krugman opined in early 2021 that "fighting covid is like fighting a war." This paper argues that the Covid-19 pandemic shares many traits...

The empirical literature on finance and development suggests that countries with better developed financial systems experience faster economic growth. Financial development - as captured by size, depth, efficiency, and reach of financial systems - varies sharply around the world, with large...