Club convergence may arise as an empirical prediction from standard neoclassical growth models where the aggregate production technology displays diminishing returns to capital. This requires that the propensity to save from wage income is greater than the propensity to save from capital income....

Present-biased preferences cause distortions in consumption that can motivate the use of paternalistic in-kind transfers. Empirically, goods are consumed to different degrees when consumption outlay changes. Economists distinguish between necessary goods and luxury goods. A present-biased...

The First Millennium Development Goal (MDG#1) is to cut the fraction of global population living on less than one dollar per day in half, by 2015. Foreign aid financed investments may contribute to the attainment of this goal. But how much can aid be reasonably expected to accomplish? A...