The hallmark of the recent development and growth literature is the quest to identify institutions that explain significant portions of the observed differences in living standards. There are two drawbacks to the prominent approaches that focus either on the global sample, or on developing...

We combine the efficient method of moments with appropriate algorithms from the optimal filtering literature to study a collection of models for the U.S. short rate. Our models include two continuous-time stochastic volatility models and two regime switching models, which provided the best fit...

Economic growth has been a showcase of model uncertainty, given the many competing theories and candidate regressors that have been proposed to explain growth. Bayesian Model Averaging (BMA) addresses model uncertainty as part of the empirical strategy, but its implementation is subject to the...

In this paper, we identify two major changes in the dynamics of the federal funds rate in the 1990s. We model the desired rate in a two-regime setting, one when the Fed makes no change and the other when the Fed is moving the desired rate to a new level. We find that the 1990s saw longer...

This paper shows that the Zero-Information-Limit-Condition (ZILC) formulated by Nelson and Startz (2006) holds in the GARCH(1,1) model. As a result, the GARCH estimate tends to have too small a standard error relative to the true one when the ARCH parameter is small, even when sample size...