We consider a dynamic allocation problem under alternative insurance and capital market regimes and proper risk aversion separate from intertemporal substitution. We apply the model to study the effect of one-size-fits-all transfers. We find that one-size-fits-all transfers can have different...

The private investment response to structural reforms in developing countries is of paramount importance, both for the future economic growth and the survival of the reforms themselves. By employing a sample of countries, recipients of World Bank Structural Adjustment Loans, the present paper...

During capital control episodes, large price deviations between American Depositary Receipts (ADR) and their underlying stocks signal that a currency crisis is about to occur. We interpret this price spread as the price of a call option. Using option pricing theory we derive detailed information...

The British proposal to create an International Finance Facility in order to 'frontload' $50 billion in aid per year until 2015 has generated a lot of attention and will likely be a major topic at the G8 meeting this July. But the IFF has also been shrouded in confusion and misconceptions. This...

Bekaert, Harvey, and Ng (2005a) define contagion as quot;correlation over and above what one would expect from economic fundamentalsquot;. Based on a two-factor asset pricing specification to model fundamentally-driven linkages between markets, they define contagion as correlation among the...

This model of policy evaluation has been developed to identify factors that cause policy outcomes to diverge from the intended results. In this model the explanatory factors may be inherent to the conceptual and institutional framework to which policy makers adhere, or they may be quot;real...

This paper analyzes the determinants of international financial institutions (IFIs)'s lending decisions to Pakistan. At the example of three major IFIs, the World Bank, IMF and ADB, this paper suggests that political economic factors, notably bureaucratic interest of international civil servants...

In this paper, we quantify foreign aid's potential as an insurance mechanism against macroeconomic shocks. Within a dynamic model of aid flows between two endowment economies, we show that at least three fourths of the large welfare costs of macroeconomic fluctuations in poor countries could be...

The World Bank has shown an impressive ability to adapt to changing realities and transform itself during its more than sixty years of activity. Currently, however, it is facing an attack on the very legitimacy of its existence on various fronts. This paper will consider the main critiques...

In the last decades the number of refugees from conflict regions in Africa increased dramatically. West Africa is the cradle of migration from Sub-Saharan Africa to Europe, were most African migrants with overseas destinations live. The European Union shares dual responsibility for the...