Recent empirical studies have found a robust correlation between competitive exchange rates and economic growth in developing economies. This paper presents (i) a formal model to help explain these findings and (ii) econometric evidence on the relation between investment and the real exchange...

Why did the Japanese economy stagnate beforeWorldWar II, how did it achieve rapid economic growth after the war, and why did it stagnate again after the 1970s? To answer these questions, I developed a two-country trade model with technology transfer, where firms in a developed country (the U.S.)...

We provide cross-country evidence that rejects the traditional interpretation of the natural resource curse. First, growth depends negatively on volatility of unanticipated output growth independent of initial income, investment, human capital, trade openness, natural resource dependence, and...

Using a newly constructed dataset on trade in services for 192 countries from 1970 to 2014, this paper shows that services currently constitute one-fourth of world trade and an increasingly important component of global production. A detailed analysis of patterns and stylized facts reveals that...

This paper develops the seminal ideas of Nicholas Kaldor into a Centre-Periphery framework of the world economy where the Centre faces the problem of surplus capacity and effective demand and the Periphery faces a capacity constraint. In such a framework, Harrod-type 'foreign trade multiplier'...

This paper analyzes the structural change implications of consumer credit expansions in a dual-sector open economy growth model. Policy-induced increases in banks' willingness and ability to lend result in new consumer lending, boosting consumption demand and average wages in the nontradable...

The volatility of unanticipated output growth in income per capita is detrimental to long-run development, controlling for initial income per capita, population growth, human capital, investment, openness and natural resource dependence. This effect is significant and robust over a wide range of...

We construct and estimate a unified model combining three of the main sources of cross-country income disparities: differences in factor endowments, barriers to technology adoption and the inappropriateness of frontier technologies to local conditions. The key components are different types of...

Brunnschweiler and Bulte (2008) provide cross-country evidence that the resource curse is a “red herring” once one corrects for endogeneity of resource exports and allows resource abundance affect growth. Their results show that resource exports are no longer significant while the value of...

Evidence regarding the relationship between distribution, demand, and growth in the short run has been mixed. Open economy models that create the possibility of "beggar-thy-neighbor" growth offer one theoretical explanation for why this may be expected. Several authors have argued recently,...