This paper examines the empirical relationship between financial development and real per capita GDP growth, physical capital accumulation and total factor productivity growth. We use a panel data set of 78 countries over 35 years (1961-1995) using system GMM for dynamic panels. We correct the...

While many studies document the influence of global liquidity and risk aversion on emerging markets spreads, less is known about their link with the US yield curve –a point that becomes more relevant at today´s historically low US rates. In this note, we examine the channels through which...

The fact that minimum wages seem specially binding for young workers has led some countries to adopt age-differentiated minimum wages. We develop a dynamic two sector labor market model where workers with heterogeneous endowments of natural skills gain productivity through experience. We compare...

The banking crisis in Chile in 1981-83 was widespread - representing about 60 percent of the banking system's total portfolio. The crisis arose because of macroeconomic problems and was exacerbated by unsound financial practices. The government was faced with two extreme solutions: to let...

We argue that one reason why emerging economies borrow short term is that it is cheaper than borrowing long term. This is especially the case during crises, as in these episodes the relative cost of long-term borrowing increases. We construct a unique database of sovereign bond prices, returns,...

Using unique data on mutual fund portfolios with different investment scopes, we study the extent of international diversification. Mutual funds invest in a surprisingly limited number of stocks—about 100. The number of holdings from a given region declines as the investment scope broadens....

This paper documents the major trends in debt (bank and bond) markets in emerging economies since the early 1990s, when these markets started expanding. The paper shows that banks have increased in size in most emerging economies though from low bases. But bond markets have expanded even more,...

Financial globalization has gathered attention since the early 1990s because of its macro-financial and crisis implications and its perceived large expansion. But financial globalization has taken different forms over time. This paper examines two important concurrent dimensions of...