To study the transmission of US shocks to emerging markets, we develop and estimate an asymmetric two-country real business cycle model. The asymmetries in the model arise due to the differences in the size and the riskiness of the economies, as well as the financial frictions in the emerging...

We present evidence that an increase in investment as a share of GDP predicts a higher growth rate of output per worker, not only temporarily, but also in the steady state. These results are found using pooled annual data for a large panel of countries, using pooled data for non- overlapping...