A positive historical shock to external spreads can lead to an increase in domestic spreads and a reduction in the cyclical component of output. Shocks to external spreads immediately after the Mexican peso crisis had a sizable effect on movements in output and domestic interest rate spreads in...

In a country where financial intermediation is highly inefficient (with the enforcement costs of loan contracts very high, for example), or in one experiencing great volatility and large adverse shocks in output, the likelihood of an inefficient equilibrium is great. In East Asia it may be in...

This literature review joins with recent studies in arguing that financial integration must be carefully prepared and managed to ensure that the benefits outweigh the short-run risks. But in contrast with some other studies, it adopts a more skeptical view of the benefits of capital flows other...

"The authors propose a "bottom up" approach to link public investment programs with a class of macro models recently developed to quantify Strategy Papers for Human Development (SPAHD) in low-income countries. The methodology involves establishing constant-price projections of investment outlays...

"This paper analyzes the effects of monetary policy and fiscal adjustment on output and unemployment in Turkey. The model on which the analysis is based accounts for rural-urban migration, a large urban informal sector, flexible exchange rates, a dollarized banking system, and interactions...