Showing papers by "Gian Maria Milesi-Ferretti published in 1998"
TL;DR: In this article, the authors examined which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance in low and middle-income countries, and found that an exchange rate crash is associated with a fall in output growth and a recovery thereafter.
Abstract: This paper studies large reductions in current account deficits and exchange rate depreciations in low- and middle-income countries. It examines which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance. Both domestic factors, such as the low reserves, and external factors, such as unfavorable terms of trade, are found to trigger reversals and currency crises. The two types of events are, however, distinct; an exchange rate crash is associated with a fall in output growth and a recovery thereafter, while for reversals there is no systematic evidence of a growth slowdown.
443 citations
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TL;DR: In this article, the authors examined which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance, and found that both domestic factors such as the low reserves, and external factors, such as unfavourable terms of trade and high interest rates, trigger reversals and currency crises.
Abstract: This paper studies sharp reductions in current account deficits and large exchange rate depreciations in low- and middle-income countries. It examines which factors help predict the occurrence of a reversal or a currency crisis, and how these events affect macroeconomic performance. It finds that both domestic factors, such as the low reserves, and external factors, such as unfavourable terms of trade and high interest rates in industrial countries, trigger reversals and currency crises. The two types of events are, however, distinct; indeed, current account imbalances are not sharply reduced in the years following a currency crisis. Economic performance around these events is also quite different. An exchange rate crash is associated with a fall in output growth and a recovery thereafter, while for reversal events there is no systematic evidence of a growth slowdown.
168 citations
TL;DR: In this paper, the effects of factor income taxation and of subsidies to human capital accumulation in models of endogenous growth are examined, in particular how these effects depend on the specification of the leisure activity and on the technology and tax treatment of the sector producing human capital.
154 citations
TL;DR: In this article, the authors studied determinants and consequences of sharp reductions in current account imbalances (reversals) in low and middle-income countries, and found that both domestic variables, such as the current account balance, openness and the level of reserves, and external variables such as terms of trade shocks, US real interest rates, and growth in industrial countries, seem to play an important role in explaining reversals in current-account imbalance.
148 citations
TL;DR: In this article, the effects of income and consumption taxation on economic growth are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital.
Abstract: The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed, and it is shown that in general the taxation of factor incomes (human and physical capital) is growth-reducing. The effects of consumption taxation on growth depend crucially on the elasticity of labor supply, and therefore on the specification of the leisure activity. The paper also derives implications for the optimal intertemporal choice of tax instruments.
114 citations
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TL;DR: In this article, the effects of income and consumption taxation on economic growth are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital.
Abstract: The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed. It is shown that the effects of taxation on growth depend crucially on whether the sector producing human capital is a market sector, on the technology for human capital accumulation and on the specification of the leisure activity. In general, the taxation of factor incomes (human and physical capital) is growth-reducing, while the effects of a consumption tax depend on the specification of leisure. The paper also derives implications for the growth-maximizing choice of tax instruments.
75 citations
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TL;DR: In this article, the effects of income and consumption taxation on economic growth are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital.
Abstract: The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed. It is shown that the effects of taxation on growth depend crucially on whether the sector producing human capital is a market sector, on the technology for human capital accumulation and on the specification of the leisure activity. In general, the taxation of factor incomes (human and physical capital) is growth-reducing, while the effects of a consumption tax depend on the specification of leisure. The paper also derives implications for the growth-maximizing choice of tax instruments.
11 citations