This paper attempts to determine the extent to which common external shocks explain simultaneous currency crises. We define crises on a country by country basis using a new criterion that takes into account variations in the volatility of exchange rates over time and across countries. Using a...

Does a country's (long-term) growth depend upon what happens in countries that are nearby? Such linkages could occur for a variety of reasons, including demand and technology spillovers. We present a series of tests to determine the existence of such relationships and the forms that they might...

Estimates of the speed of convergence vary widely and depend on the methodology employed. While cross-sectional regressions typically find slow convergence, time series estimates suggest that incomes converge rapidly. This paper uses panel methods to combine cross-sectional and time series...

We examine a concerted debt reduction deal between a sovereign debtor, a private creditor, and an official creditor, who insures the deposits of the commercial bank. Our results show that a weakening of the financial position of the commercial bank reduces the contribution of the commercial bank...

Using cross-country data, we review the empirical evidence concerning long-term labor and total factor productivity growth. We find that the conclusions one can draw from cross-country data are surprisingly modest. Nevertheless, we confirm the crucial role for physical capital accumulation in...

We examine the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that North-South trade accords can serve as "credibility-enhancing" mechanisms towards treatment of foreign investment, inducing additional...

We introduce a monopolistically-competitive model of foreign lending in which both explicit and implicit fixed-premium deposit insurance increase the degree to which bank participation in relending to problem debtors falls below its globally optimal level. This provides a channel for...

This paper introduces a model of international lender of last resort (ILLR) activity under asymmetric information. The ILLR is unable to distinguish between runs due to debtor insolvency and those which are the result of pure sunspots. Nevertheless, the ILLR can elicit the underlying state of...

Among the reasons for joining a monetary union, attention has fallen on the potential for improving a nation's monetary policy credibility. In this paper, we examine the decision problem faced by an outside country deciding whether or not to join an existing monetary union. Our analysis...

This paper examines the impact of European Monetary Union (EMU) accession on bilateral Portuguese international borrowing patterns. Using a difference-in-differences methodology, I demonstrate that Portugal’s accession to the EMU was accompanied by a change in its borrowing pattern in favor of...