In this paper we consider whether the effects of trade liberalisation on GDP growth are offset by changes in other policy variables, namely changes in fiscal policy. Governments increase welfare spending as a response to greater exposure to international trade. We find for a sample of developing countries that this is not the case. Countries that liberalise their trade regimes do increase their...

This paper deals with the effects of EMU enlargement (European Economic and Monetary Union) by evaluating the economic efficiency of growth policies of the 25 member countries. By using Data Envelopment Window Analysis the paper measures the policies adopted initiating economic growth of the 25 EU members for the time period of 1995–2005. Different factors reflecting countries’ investment polic...

De Long and Summers (1991) began a literature examining the impact of equipment investment on growth. In this paper we examine such a relationship for developing countries by considering imports of equipment from advanced countries as our measure of equipment investment for a sample of 55 developing countries. We examine whether the level of human capital in a country affects its ability to ben...

We modify a Lucas-type endogenous growth model to contain endogenous labour supply, imperfect international capital movements, and estimated interest and education time functions. Solutions based on realistic calibrations show that (i) the rate of human capital depreciation through ageing has a much stronger negative impact on growth than further changes in the population growth rate or the Fri...

This paper develops a growth model aimed at understanding the potential effects of globalization of production on rate of innovation, distribution of skilled labor income between the North and South, and welfare of skilled workers in both regions. We adopt a dynamic general equilibrium productcycle model, assuming that the North specializes in innovation and the South specializes in imitation. ...

We revisit the debate on the benefits of financial integration by providing a unified framework able to account for gains from capital accumulation and risk sharing. We consider a two-country neoclassical growth model with aggregate uncertainty. We allow for country asymmetries in terms of volatility, capital scarcity and size. In our general equilibrium model, financial integration has an effe...

A recent body of empirical research has documented a strong association between the level and volatility of the RER and economic growth. This research has relied on a variety of econometric techniques applied to large cross-country data sets. Although the documented positive effects of both RER competitiveness and stability on growth appear to be robust, it is still unclear what the mechanisms ...

Within an endogenous growth framework, this paper empirically investigates the impact of financial capital on economic growth for a panel of 60 developing countries, through the channel of domestic capital formation. By estimating the model for different income groups, it is found that while private FDI flows exert beneficial complementarity effects on the domestic capital formation across all ...

A recent body of empirical research has documented a strong association between the level and volatility of the RER and economic growth. This research has relied on a variety of econometric techniques applied to large cross-country data sets. Although the documented positive effects of both RER competitiveness and stability on growth appear to be robust, it is still unclear what the mechanisms ...

We study the importance of the local elite as a determinant of the e¤ectiveness of foreign aid in developing countries. An "extractive" elite will misuse aid ‡ows, an issue that is probably as old as foreign aid itself. We proxy for the existence of an "extractive" elite by using an historically determined variable: the percentage of European settlers in colonial times. Our econometric results ...