Suchergebnisse

We introduce a new "supply-push" instrument for foreign aid, to be used together with an instrumental variable estimator that filters out unobserved common factors. We use this instrument to study the effects of aid on macroeconomic ratios, and especially the ratios of consumption, investment, imports and exports to GDP. We cannot reject the hypothesis that aid is fully absorbed rather than used to build foreign reserves or exiting as capital flight, nor do we find evidence of Dutch Disease effects. Aid leads to higher consumption, while the evidence that it promotes investment is less robust.

This paper surveys the empirical literature on the growth effects of education & social capital. The main focus is on the cross-country evidence for the OECD countries, but the paper also briefly reviews evidence from labor economics, to clarify where empirical work on education using macro data may be relatively useful. It is argued that on balance, the recent cross-country evidence points to productivity benefits of education that are at least as large as those identified by labor economists. The paper also discusses the implications of this finding. Finally, the paper reviews the emerging literature on the benefits of social capital. Since this literature is still in its early days, policy conclusions are accordingly harder to find.

The paper discusses three econometric problems that are rarely given adequate discussion in textbooks: model uncertainty, parameter heterogeneity, and outliers. Leamer's extreme bounds analysis can be adapted to address all three problems simultaneously. Two examples are presented based on an influential cross‐country growth paper by Levine and Renelt (American Economic Review, vol. 82, 1992, pp. 942‐63).