This paper inspects the statement found in macroeconomic text books that under a flexible exchange rate regime with perfectly elastic capital flows monetary policy is effective and fiscal policy is not. The logical validity of the statement requires that the domestic price level effect of...

In the late 1990s the bilateral and multilateral development agencies placed increasing emphasis on poverty reduction in developing countries. This emphasis led to the establishment by the United Nations of the so-called International Development Targets for poverty reduction. The achievement of...

There is a considerable literature on the growth performance of the sub-Saharan countries, which tends to focus on average rates of growth over shorter or longer periods. This paper demonstrates that a key characteristic of the countries of the sub-Saharan region is the instability of growth...

Common sense and economic theory indicate one can have too much even of good things. This paper investigates two fundamental relationships: that export growth may stimulate or reduce growth of non-export sectors; and that foreign direct investment may ‘crowd-in’ or ‘crowd...

In a recent paper Dollar and Kraay come to sweeping conclusions about economic growth and the poor. On the basis of the empirical work they assert that standard World Bank and IMF policy packages are good for the poor. This critique demonstrates that (i) the empirical work is based on...

Recent development literature has placed priority on poverty reduction, and on possible growth enhancement from a more equal distribution of assets and income. At the same time, empirical work consistently shows that economic growth is no more than distribution neutral. In that context, this...