Thorsten Beck, Steven Poelhekke, 26 February 2017

The financial sector plays a critical role in intermediating domestic savings into domestic investment, so it should serve as an important absorption tool for natural resource windfalls. Using a panel dataset of over 150 developed and developing countries, this column argues that unexpected exogenous windfalls from natural resource rents are not intermediated. The findings are consistent with the negative long-term relationship between the reliance of a country on natural resources and financial sector development.

Manthos Delis, Iftekhar Hasan, Steven Ongena, 22 February 2017

The positive relationship between democratic development and economic outcomes is well established. Using three decades of international data, this column identifies a new channel for this effect – the cost of credit to corporations. It also analyses loan pricing in Turkey to reveal a substantial rise in the average cost of lending after the attempted coup d’etat in July 2016. Together, these results highlight how efficiency in loan pricing results in a comparative advantage for firms in democratic countries over those in less democratic or authoritarian countries.

Stelios Michalopoulos, Elias Papaioannou, 14 February 2017

Over the past decades, economists working on growth have ‘rediscovered’ the importance of history, leading to the emergence of a vibrant, far-reaching inter-disciplinary stream of work.  This column introduces the second eBook in a new three-part series which examines key themes in this emergent literature and discusses the impact they have on our understanding of the long-run influence of historical events on current economics. This volume focuses on attempts by economists to shed light on the effects of European colonisers on development and culture across Africa and Asia.

Thorvaldur Gylfason, Per Wijkman, 06 February 2017

There is a cross-country relationship between economic performance and both economic and political diversification. This column presents global evidence that between 1962 and 2012, both types of diversification were closely related to economic performance. This period included the spread of democracy, the global liberalisation of trade, and the termination of the Cold War. The recent retreat of democracy, the popular reaction to trade liberalisation in key countries, and a new cold war appear likely to reduce economic efficiency and growth. 

Daron Acemoglu, James Robinson, 30 January 2017

The immense economic inequality we observe in the world today is the path-dependent outcome of a multitude of historical processes, one of the most important of which has been European colonialism. This column, taken from a recent Vox eBook, discusses how colonialism has shaped modern inequality in several fundamental, but heterogeneous, ways.

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