Many developing countries are resource-constrained – that is, they are running a current account deficit. The deficit in the current account indicates that aggregate demand exceeds aggregate supply. Alternatively, domestic investment cannot be financed using national savings, necessitating...

The paper examines the effects of exchange rate fluctuations on real output and the price level in a sample of 33 developing countries. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations help to...

Using data for a sample of developing countries, we analyze the effects of external flows, namely migrants' remittances and FDI flows, on real output growth, price inflation, and components of aggregate demand. The historical evidence indicates unstable patterns of FDI inflows to a sample of...