This paper considers the main elements of the standard pattern of fi nancial liberalization that has become widely prevalent in developing countries. The theoretical arguments in favour of such liberalization are considered and critiqued, and the political economy of such measures is discussed. The problems for developing countries, with respect to fi nancial fragility and the greater propensit...

This paper builds a two-country (North, South), two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good is produced with a clean and a dirty input. A temporary Northern policy combining clean research subsidies and a trade tax can ensure sustainable growth but Northern ...

The paper has three purposes. First, it explains how the impact of liberalization of service sectors on output growth differs from that of liberalization of trade in goods. Second, it suggests a policy-based rather than outcome-based measure of the openness of a country’s services regime. Such openness measures are constructed for two key service sectors, basic telecommunications and financial ...

This paper builds a two-country, two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good generates more or less emissions depending on its relative use of a clean and a dirty input. I show that a unilateral policy combining clean research subsidies and a trade tax can e...

Evidence supporting the positive effects of capital account liberalization on growth is mixed at best. Even after conditioning on the quality of domestic financial institutions, a significant number of studies still find no effect. One possible explanation is reverse causation. If low growth countries liberalize in order to spur growth, the observed correlation between growth and liberalization...

The development of pre-industrial Europe was driven by the expansion of trade. This paper describes the patterns of trade and shows how they can be understood in terms of differences in trading costs. It discusses how the different levels of trade–from local to transoceanic-contributed, both quantitatively and qualitatively, to the process of growth. JEL Categories: F14, F15, F43, N13, N73, O19...

This paper evaluates the impact of global external rebalancing on Developing Asia and the rest of the world using a multi-country multi-sector quantitative model of production and trade. Developing Asia countries currently running a trade surplus (such as People’s Republic of China or Malaysia) see a substantial rise in relative wages and an appreciation in the real exchange rate. They also see...

Endogenous growth theory has had some success in explaining the observed data related to the process of economic growth. However, the results of the models in this literature are typically very sensitive to their micro-economic structure. It is therefore important to understand how the growth process behaves under more general specifications of such features as the number of commodities, the nu...

This paper examines the macroeconomic effects of foreign aid transfers in a small open recipient economy. The focus, however, is not on the impact of foreign aid per se but rather on aid’s influence conditional upon the different budgetary financing policies under the discretion of the recipient government. We compare the effects of an aid transfer tied to investment in a public good from a pur...

5 Using novel estimates of sectoral total factor productivities for 72 countries across 5 6 decades we provide evidence of relative productivity convergence: productivity grew 7 systematically faster in initially relatively less productive sectors. These changes have 8 had a significant impact on trade volumes and patterns, and a non-negligible welfare 9 impact. Had productivity in each country...