OPTIMAL FOREIGN BORROWING REVISITED

Foreign capital has become increasingly important in financing investment and growth in developing countries. Foreign capital flows, however, can be volatile as is evident from the recent financial crises. It has also recently been noted by researchers that there is little systematic empirical evidence that foreign capital contributes to the economic growth of developing countries. In this context, this paper attempts to theoretically reevaluate the borrowing behaviour of a developing economy that relies on foreign borrowing for its capital formation. In particular, this paper investigates the implications of different lending policies of international financial institutions. It is found that no matter whether the borrowing interest rate increases with the level of foreign debt per capita or with the foreign‐capital/total‐capital ratio, the economy always moves toward the stationary state. The result holds even when the representative agent regards the interest rate given as constant. This implies that foreign borrowing does help economic growth, irrespective of lending policies of international financial institutions.     

An Assessment of the Competency of Secondary School Teachers in in Consumer Education,Economics, and Personal Finance

This study investigated the competency of persons teaching consumer education in Oregon's public schools. A 50-item instrument, based on concepts outlined in The Oregon Personal Finance Education Guide, was developed and used for the assessment. A comparison of competency according to teachers' subject-matter backgrounds (business, home economics, mathematics and social studies) was made. Item difficulty indices calculated on 185 completed instruments revealed a need for teacher upgrading in each of the four subject-matter background groups studied. No significant differences were found in the total mean scores of teachers in the four groups. However, a significant difference between groups was discovered in the concept area dealing with money management.     

Strategic Transparency and Electoral Pressure

This paper investigates how an office‐motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re‐election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. It is also shown that electoral pressure can have a nonmonotonic effect on transparency, but a higher electoral pressure always increases the informativeness of signaling and the voter's utility.