This paper takes up a question frequently raised but rarely addressed empirically - do macroeconomic policy changes and exogenous macro shocks have significant impacts on poverty and income inequality more generally? For 15 countries in Latin America and the Caribbean over the past two decades,...

With the recent events of the large-scale financial crisis in some parts of the world and the slowly declining inflation rate in major OECD countries debt deflation has again become an important topic in economic research. In a model with debt issuing firms, financing their investment, we...

This paper analyzes the causes of the massive peso devaluation of December 1994 and the ensuing economic crisis in Mexico. The paper argues that, while earlier devaluation might have been helpful, Mexico's economic growth strategy in the early 1990s was fraught with internal inconsistencies that...

The causes of the present crisis are largely to be found in the unregulated development of new financial products and in the over-expansion of the financial sector, in particular the shadow banking sector, which emerged precisely to avoid regulation. These changes led to lower risk perception,...

The recent revision of the World Bank’s global poverty estimates based on a new $1.25 (2005 PPP) poverty line underlines their unreliability and lack of meaningfulness. It is very difficult to justify various aspects of the Bank’s approach. In the short term, less weight should be given to...

Given that financial markets operate as a Keynesian beauty contest and the real economy has no automatic tendency to converge to full-employment growth, then the simple rules of the game embodied in the policy positions believed by market participants to be held by other market participants will...