Found 1295 article(s) in category 'Economic Growth'

Emerging Market Business Cycles: The Cycle is the Trend

Emerging Market Business Cycles: The Cycle is the Trend. Mark Aguiar and Gita Gopinath, 2007, Paper. “Emerging market business cycles exhibit strongly countercyclical current accounts, consumption volatility that exceeds income volatility, and “sudden stops” in capital inflows. These features contrast with developed small open economies. Nevertheless, we show that a standard model characterizes both types of markets. Motivated by the frequent policy regime switches observed in emerging markets, our premise is that these economies are subject to substantial volatility in trend growth. Our methodology exploits…” Link

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Efficient Expropriation: Sustainable Fiscal Policy in a Small Open Economy

Efficient Expropriation: Sustainable Fiscal Policy in a Small Open Economy, By Aguiar, Mark, Manuel Amador, and Gita Gopinath. 2006

We study a small open economy characterized by two empirically important frictions – incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can amplify and prolong shocks to output. In particular, even when the government is completely benevolent, the government’s credibility not to expropriate capital endogenously varies with the state of the economy and may be “scarcest” during recessions. This increased threat of expropriation depresses investment, prolonging downturns. It is the incompleteness of financial markets and lack of commitment that generate investment cycles even in an environment where first best capital stock is constant. Link

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Institutions and Development: A View from Below

Institutions and Development: A View from Below. Rohini Pande, November 2006, Paper: “In this paper we argue the case for greater exploitation of synergies between research on specific institutions based on micro-data and the big questions posed by the institutions and growth literature. To date, the macroeconomic literature on institutions and growth has largely relied on cross-country regression evidence. This has provided compelling evidence for a causal link between a cluster of ‘good’ institutions and more rapid long run growth. However, an inability to disentangle the effects of specific institutional channels on growth or to understand the impact of institutional change on growth will limit further progress using a cross-country empirical strategy. We suggest two research programs based on micro-data that have significant potential. The first uses policy-induced variation in specific institutions within countries to understand how these institutions influence economic activity.Link

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Why the US Current Account Deficit is Sustainable

Why the US Current Account Deficit is Sustainable. Ricardo Hausmann, May 27, 2006, Paper. “Over the last couple of years, the burgeoning of the US current account deficit, reaching $792 billion in 2005 alone, has led to significant concerns about the future of the United States and the possibility of a major global crisis. With a brief respite in 1991, it comes after twenty-four years of unbroken deficits, which have totalled over $5.2 trillion. According to some doomsayers, once the massive financing required to continue paying for such a widening gap dries up…” May require purchase or user account. Link

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Economic and Social Progress Report 2000 (IPES)

Economic and Social Progress Report 2000 (IPES). Ricardo Hausmann, 2000, Paper. “Competing in the world economy does not automatically boost a nation’s productivity and restructure its economy. Such progress requires mobilizing capital, employment, technology and knowledge. Opportunities beyond the business realm must be fully exploited to the benefit of society as a whole. The Report provides clear policy guidelines and priorities for both government and the private sector to foster competitiveness…” Link

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