Adopting a time series convergence definition and panel unit root testing procedures, we fail to reject the null hypothesis of no convergence in GDP per capita across former West German states. This result stands in contrast to the findings of previous studies for West German regions using cross-section regression techniques and is contrary to the time series findings for the United States. Fro...

Government ownership of banks is very common in countries other than the United States. This paper provides cross-country, bank-level empirical evidence about political influences on these banks. It shows that government-owned banks increase their lending in election years relative to private banks. This effect is robust to controlling for country-specific macroeconomic and institutional factor...

This paper incorporates the aging population projected by the U.S. Social Security Administration to a heterogeneous-agent OLG model with idiosyncratic wage shocks and analyzes its effects on individual households, the government budget, and the overall economy. The fiscal gap caused by the demographic change is 2.94% of GDP under the intermediate projection. The effect of the aging population ...

In this paper, we estimate a health care demand function for 18 OECD countries for the period 1972-1995. We consider a demand side approach where health expenditure depend on per capita GDP and the relative price of health care. We use panel data unit root and stationarity tests to characterize our data. Then, we test cointegration between our variables with Kao[16] panel data cointegration tes...

This paper examines the interactions between Foreign Direct Investment (FDI), inequality, and growth, both from an empirical and a theoretical point of view. Using a panel of 119 developing countries, we observe that FDI promotes both inequality and growth, and tends to reduce the share of agriculture to GDP in the recipient country. We then set up a growth model of a dual economy in which the ...

Using meta-analytical techniques, we focus on 11 studies that explicitly measure the effect of a net migration variable in neoclassical convergence models and derive 57 comparable effect sizes. The data suggest that an increase in the net migration rate of one percentage point increases on average the GDP per capita growth rate by 0.13 percent, thus suggesting a net migration impact that is mor...

The variance in the logarithms of per capita GDP in purchasing-power-parity prices increased in the world from 1960 to 1968 and decreased since the mid 1970s. In the later period the convergence in intercountry incomes more than offset any increase in within country inequality. Approximately two-thirds of this measure of world inequality is intercountry, three-tenths interhousehold within count...

Capital flight often amounts to a substantial proportion of GDP in developing countries. This paper presents a portfolio choice model that relates capital flight to return differentials, risk aversion, and three types of risk: economic risk, political instability, and policy variability. Estimating the equilibrium capital flight equation for a panel of 45 developing countries over 16 years, all...

This paper explores whether the post-1980 decline in infrastructure investment in developing countries is a source of growing disparities in world per capita GDP. I start by reviewing the literature on the infrastructure-productivity link, arguing that a balanced reading of previous studies points to a significant effect of infrastructure provision on productivity. I then empirically study whet...

The aim of this paper is to make a first step towards studying the role of social expenditure and its interaction with corporate taxation in determining the destination of foreign direct investment (FDI) flows. Using panel data for 18 OECD countries and measuring the extent of social welfare policies by the (public social expenditure)/GDP ratio, we find strong support for the conjecture that re...