This paper investigates why governments in some developing countries have adopted more liberal policies than others. To construct a composite policy index, the paper applies a robust principal components analysis to Washington Consensus policy variables. The paper shows that income growth is...

We examine the view that high-quality macroeconomic policy is a necessary, but not sufficient, condition for economic growth. We first construct a new index of the quality of macroeconomic policy. We then directly compare growth rate distributions across countries with good and bad policies; use...

The remarkable economic success of the United States in the 1990s led many observers to talk about a "New Economy". This paper provides an overview of the main issues, including faster productivity growth, the stability of inflation despite very low unemployment, the reduction in output...

This paper analyzes several aspects of convergence behaviour in the Solow growth model. In empirical work, a popular approach is to log-linearize around the steady-state. We investigate the conditions under which this approximation performs well, and discuss convergence behaviour when an economy...

This paper studies the causes of policy volatility in developing countries during 1970-1999. To construct composite policy volatility indicators, the paper applies a robust principal components analysis to Washington Consensus policy variables. The results suggest three dimensions of policy...

For many developing countries, international transfers are now a significant source of income. These transfers include official development aid, private charitable donations, and personal remittances. This paper uses dynamic one-sector and multi-sector models to isolate conditions under which...