We estimate the respective contributions of institutions, geography, and trade in determining cross-country income levels using recently developed instruments for institutions and trade. Our results indicate that the quality of institutions "trumps" everything else. Controlling for institutions,...

The countries of Eastern Europe achieved two remarkable transitions in the short period of the last two decades: from plan to market and, then, in the run-up to and entry into the European Union, they rode a wave of global trade and financial market integration. Focusing on the second...

In this paper we develop a two-country dynamic general equilibrium model by means of which we seek to explain the long-run paths of a converging emerging market economy. We borrow a paradigm from the New Open Economy Macroeconomics literature and amend it to address specific features such as...

Regional trade arrangements (RTAs) in Africa have been ineffective in promoting trade and foreign direct investment. Relatively high external trade barriers and low resource complementarity between member countries limit both intra- and extraregional trade. Small market size, poor transport...

This paper presents empirical evidence on convergence of per capita output for regions within six large middle-income Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. It explores the role played by several exogenous sectoral shocks and differences in steady states...

This paper examines the dynamic relationship between trade and income. While most economists agree that increased trade leads to an increase in average income, economic theory is ambiguous about the possible effects on the long-run growth rate of the economy. Using a dynamic panel data model,...

The economic convergence consists in the very close, even identical evolutions of one variable in two different countries or regions. Within the European model, the macroeconomic and cohesion policies insure a good substantiation of the sustained economic

Turkey's performance in the current crisis shows that it has managed to weather the global stormy conditions relatively well and avoid collapsing into a full-fledged currency and financial crisis. On the face of it, one could conclude economic reforms introduced since 2001 have paid off and...

This paper presents the analysis of unconditional and convergence among the ten European countries that accessed the European Union in 2004. Unconditional convergence means that the less developed countries (with lower GDP per capita) grow faster than the more developed countries (with higher...