The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations despite a common technology, constant returns to scale and perfect international capital mobility. Private consumption is...

The paper presents a non-technical survey of some of the issues involved in the design of stabilization policy in developing countries with special emphasis on policy responses to external shocks. First, the six most important external economic parameters of developing countries are reviewed: 1)...