This paper examines the effects of foreigndirect investment (FDI) inflows to a group of six Pacific Basin economies and a control group of 11 other developing countries.

Many developing country governmentfind it virtually impossible to satisfy their inter-temporal budget constraint with conventional tax revenu. Hence they rely on revenue from the inflation tax and they reduce their interest costs through financial repression. Both the theory and evidence...

Many newly emerging markets need to increase resources available for investment. The first section of this paper shows that government deficits reduce national saving and growth. Furthermore, greater reliance in inflationary finance, financial repression and foreign borrowing as ways for...