We focus on the role that the transmission of information between a multilateral (e.g., the IMF) and a country has for optimal (conditional) reform design. The main result is that the informational advantage of the country must be strictly greater than the advantage of the multilateral in order...

The recovery in private business investment globally remains extremely weak more than seven years after the financial crisis. This paper contributes to the ongoing policy debate on the factors behind this weakness by analyzing the role of growth prospects and uncertainty in explaining...

This paper makes two contributions to the literature on the impact of trade on income. First, we use heterogeneous panel cointegration techniques that are robust to omitted variables and endogenous regressors to estimate the effect of trade on income for 81 developed and developing countries,...

This paper empirically assesses how democratization affects real exchange rates. By doing this, we combine so far separated strands of the economic literature and argue that democratization reduces currency undervaluation leading to a real exchange rate appreciation. We test this hypothesis...

This paper analyzes the relationship between gender and corruption, controlling for country-specific heterogeneity in a panel framework. Using annual observations in a pooled setting (no country-fixed effects) confirms the positive link between the involvement of women in society and the absence...

Pure time series-based tests fail to find empirical support formonetary exchange rate models. In this paper we apply pooled timeseries estimation on a forward-looking monetary model, resulting inparameter estimates which are in compliance with the underlyingtheory. Based on a panel version of...

This paper studies the effects of foreign direct investment (FDI) on national economic growth with the help of GMM panel regressions. Effects on productivity growth, capital and labor inputs as well as innovation activities are distinguished. Furthermore, less and more developed countries as...

Climate change researchers predict a dramatic increase in global average temperature over the next decades. We use past temperature and precipitation fluctuations to investigate whether changes in temperature and precipitation are associated with decreases in economic growth. A GMM panel...

This paper explores the relationship between financial reforms, financial liberalization and the quality of banking regulation and supervision for financial fragility by applying a dynamic two-step system generalized method of moments GMM panel estimator technique. The finding of this study is...

Excessive credit creation by banks was at the root of the recent financial crisis. Nevertheless, micro-prudential regulation lacks a clear methodology to identify these banks. Combining arguments from banking and auction theory, we show that overoptimism causes excessive lending, subsequently...