JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Theory: Cultural variables are incorporated into a baseline endogenous economic growth model. Hypotheses: Cultural attitudes toward achievement and thrift have a positive effect on economic growth. Cultural attitudes concerning postmaterialism have a negative effect on economic growth. Methods: Ordinary least squares regression is used to test economic and cultural models of growth on a cross section of 25 countries. The encompassing principle is used to resolve competing theoretical specifications and to generate a final parsimonious model. A variant of Leamer's Extreme Bounds Analysis (EBA) is used to evaluate the sensitivity of parameter estimates. The conclusions are further supported by nonparametric methods including robust regression and bootstrap resampling. The data for the analysis are from the World Values Survey (1990) and from Levine and Renelt (1992).Results: An empirical model that incorporates both cultural and economic variables is superior to an explanation emphasizing one set of these variables. The final model is robust to: (1) alterations in the conditioning set of variables; (2) elimination of influential cases; and (3) variations in estimation procedures.

The relationship between democracy and globalization has been a subject of both scholarly and policy debate. Some argue that the two go hand in hand – that unrestricted international transactions encourage political accountability and transparency and that politically free societies are least likely to restrict the mobility of goods and services. But others argue that democracies, in which special interests that suffer from foreign competition have voice, are more likely to have closed markets, and vice versa. Our analysis differs from its predecessors in three ways. We seek to uncover general patterns by considering as long a period as possible and all countries with the relevant data. We consider multiple dimensions of globalization, analyzing both trade liberalization and capital account liberalization. And we estimate these relationships using an instrumental variables strategy that allows us to confront the issue of simultaneity. Our findings support the existence of positive relationships between democracy and globalization.

Speculative currency attacks are a regular feature of the international political economy. Nevertheless, not all speculative attacks result in a devalued currency. In many cases, politicians were willing and able to defend the exchange rate peg. I develop a model of strategic interaction between speculators in currency markets and policymakers in governments. This model indicates that speculative attacks occur when economic fundamentals are weak or when there is uncertainty about the capability and/or willingness of governments to defend the currency peg. I show that the government's decision to defend the peg reflects institutional, electoral, and partisan incentives. I test hypotheses from this model on a sample of 90 developing countries between 1985 and 1998 using a strategic probit model.

The authors examine the conditions under which democratic events, including elections, cabinet formations, and government dissolutions, affect asset markets. Where these events have less predictable outcomes, market returns are depressed and volatility increases. In contrast, where market actors can forecast the result, returns do not exhibit any unusual behavior. Further, political expectations condition how markets respond to the political process. When news causes market actors to update their political beliefs, market actors reallocate their portfolios, and overall market behavior changes. To measure political information, Professors Bernhard and Leblang employ sophisticated models of the political process. They draw on a variety of models of market behavior, including the efficient markets hypothesis, capital asset pricing model, and arbitrage pricing theory, to trace the impact of political events on currency, stock, and bond markets. The analysis will appeal to academics, graduate students, and advanced undergraduates across political science, economics, and finance.