This paper highlights a problem in using the first-difference GMM panel data estimator cross-country growth regressions. When the time series are persistent, the first-differenced GMM estimator can be poorly behaved, since lagged levels of the series provide only weak instruments for subsequent...

This paper examines the adequacy of the augmented Solow model for explaining international variation in the standard of living and growth rates. Robust estimation and measurement error diagnostics are used to assess the model in a variety of dimensions. The main findings are that the speed of...

In middle-income countries, the informal sector often accounts for a substantial fraction of urban employment. We develop a general equilibrium model with matching frictions in the urban labour market, the possibility of self-employment in the informal sector, and scope for rural-urban...

This paper explores the role of 'social capability' in growth and development. We present a wide variety of evidence to show that economic growth is strongly related to the extent of a country's initial social development. We also show that differences in social capability can explain the...

The conventional wisdom is that postwar economic growth has been unpredictable. In the 1960s few observers accurately forecast which countries would grow quickly. In this paper we show that indexes of social development constructed in the early 1960s have considerable predictive power. These...

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 examines the structural determinants of output volatility in developing countries, and especially the roles of geography and institutions. We investigate the volatility effects of market access, climate variability, the geographic predisposition to trade, and various measures of...

This paper analyses the remarkable growth experience of Indonesia since 1966. Over a thirty-year period, GDP per capita rose more than fourfold, despite unfavourable initial conditions, some weak institutions, and flawed microeconomic policies. The paper attributes this strong performance to a...

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 greater overall economic...

Several recent papers have argued that trade and financial development may be linked, either for political economy reasons, or because foreign competition and exposure to shocks lead to changes in the demand for external finance. In this paper we use the cross-country and time-series variation...