This paper develops a macroeconomic general-equilibrium model fully parameterized for the Chilean economy. The model's basic relations can be rigorously derived from intertemporal optimization by rational forward-looking agents. However, it also introduces critical real-world features - such as...

The debate on the effectiveness of foreign aid has intensified in recent years as aid has come under increasing budgetary pressures in donor countries. Whatever the merits of the opposing arguments, the fundamental issue arises of whether conventionally-used measures of aid such as ODA, which...

(Disponible en idioma inglés únicamente) La discusión sobre la eficacia de la asistencia externa se ha intensificado en los últimos años, en la medida en que la asistencia ha venido experimentando cada vez más presiones presupuestarias en los países donantes. Independientemente de los...

The authors provide an empirical evaluation of the impact of infrastructure development on economic growth and income distribution using a large panel data set encompassing over 100 countries and spanning the years 1960-2000. The empirical strategy involves the estimation of simple equations for...

A recent but rapidly growing empirical literature focuses on the relationship between public and private capital. But for the most part, it ignores the heterogeneity of public investment. In many countries, especially in the developing world, public investment includes not only basic...

The authors analyze the response of private and public investment to external shocks, macroeconomic adjustment, and structural reform in three sets of countries: (a) countries that pursued structural reform and liberalization in Latin American in the 1970s (Chile) or the 1980s (Mexico and...

Conventional aggregate models of open economies typically rule out trade in capital goods. But capital goods account for a major share of the world trade. In 1990, they represented more than 40 percent of U.S. merchandise exports and more than 30 percent of its imports. In the same year, capital...