We generalise the traditional development-accounting framework to an open-economy setting. In addition to factor endowments and productivity, relative factor costs emerge as a source of real-income variation across countries. These are shaped by bilateral trade determinants (which underpin the...

We generalise the traditional development-accounting framework to an open-economy setting. In addition to factor endowments and productivity, relative factor costs emerge as a source of real-income variation across countries. These are shaped by bilateral trade determinants (which underpin the...

Many economists argue that financial market development plays a role in fostering economic development. However, the question of how to extend financial access to the unbanked in underdeveloped countries has long remained a puzzle in the development finance literature. Much of the debate thus...

Can economic theory help - forecasting key macroeconomic variables? This article aims to provide some insight into the question by drawing lessons from the literature. The definition of ‘economic theory’ includes a broad range of examples, such as accounting identities, disaggregation and...