Suchergebnisse

A description of a simple dynamic macroeconomic simulation model of a small open developing economy, which is considered a starting point for improved analysis of a broad range of issues. A set of computer simulations explores in what direction & through what channels policy variables typically addressed to correct external imbalances (fiscal, monetary, & exchange rate policies) affect other macroeconomic variables (real output, inflation, medium-term growth, & real wage) in a developing economy. Focus is on the effects of four domestic policy shocks: increase in domestic credit, increase in real government spending on domestic goods, central bank intervention in the free exchange market, & devaluation of the official rate. Model-based predictions are discussed. 1 Table, 4 Figures, 12 References. A. Thyme

This paper addresses the complex and overlooked relationship between the receipt of workers' remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality - specifically, to an increase in the share of funds diverted by the government for its own purposes. Empirical testing of this proposition is complicated by the likelihood of reverse causality. In a cross section of 111 countries we document a negative impact of the ratio of remittance inflows to GDP on domestic instituti