We propose firm-specific (idiosyncratic) uncertainty as a key cross-country determinant of the total credit allocated to the private sector. We show that in the presence of informational asymmetry in the credit market, theory suggests that higher uncertainty lowers the ratio of private credit to...

This paper examines the impact of a compositional change in public expenditure on long-run growth. To do this, we construct a new dataset based on the IMF's government finance statistics (GFS) yearbook covering the period 1970-2010 for 56 countries (14 low-, 16 medium-, and 26 high-income...