Growth is endogenous in small open economies with substantial hidden or open unemployment, even under constant returns … to scale. Growth promoting policies, however, have implications for the balance of trade, and two instruments are needed … in order to achieve targets for both the growth rate and the balance of trade. The real exchange rate can serve as one of …

Recent empirical studies have found a robust correlation between competitive exchange rates and economic growth in … relation between investment and the real exchange rate. The model emphasizes the existence of (hidden) unemployment as a source … of endogenous growth, even under constant returns to scale. Growth promoting policies, however, affect the external …

Recent empirical studies have found a robust correlation between competitive exchange rates and economic growth in … relation between investment and the real exchange rate. The model emphasizes the existence of (hidden) unemployment as a source … of endogenous growth, even under constant returns to scale. Growth promoting policies, however, affect the external …

underemployment. Our paper offers to look at skill formation as a demand side problem not as a traditional supply side problem and … group leading to underemployment through the expansion of the informal sector. Both effects are due to shortage of … complementary investment in production activities. Our theoretical findings are motivated by existing empirical evidence and a fresh …

undervaluations increase investment and the share of intermediate and capital goods imported, and decrease the shares of consumption …, wages, the services sector, and consumption goods imported. Overvaluations cause a reduction in investment, and an increase …

undervaluations increase investment and the share of intermediate and capital goods imported, and decrease the shares of consumption …, wages, the services sector, and consumption goods imported. Overvaluations cause a reduction in investment, and an increase …

underemployment. Our paper offers to look at skill formation as a demand side problem not as a traditional supply side problem and … group leading to underemployment through the expansion of the informal sector. Both effects are due to shortage of … complementary investment in production activities. Our theoretical findings are motivated by existing empirical evidence and a fresh …