A growing body of evidence shows that businesses in developing economies are systematically smaller, grow more slowly, and exhibit lower turnover than those in advanced economies. These patterns are driven in part by nonemployer and micro businesses, which absorb the bulk of workers in low-income settings. This article reviews macro development research that extends the standard Lucas–Hopenhayn framework to account for the smaller size and more limited dynamism of businesses in poorer economies. Distortions that disproportionately affect high-productivity firms, together with lagging technologies, emerge as central explanatory forces, though they often fall short of replicating the empirical size-to-GDP elasticity. Incorporating nonemployers appears to improve the model's ability to match several dimensions of the data. Identifying actionable sources of distortions and technology gaps and combining firm-level data with individual-level sources are highlighted as additional promising avenues to improve the profession's understanding of sources of the development problem.
International labor migration from developing to developed countries generates income gains for migrants that dwarf those from any known development intervention, with workers routinely experiencing 4–5-fold wage increases upon migration. These individual gains translate into massive remittance flows to developing countries that far exceed foreign aid flows. This review synthesizes the rapidly growing literature on migration's impacts on origin countries, emphasizing studies with credible causal identification. The evidence progresses from individual and household effects, where migrants and their families experience substantial gains in income, education investments, and consumption smoothing, to broader impacts on the origin area, including regional economic development and widespread human capital formation. Contrary to concerns about so-called brain drain, recent research reveals brain gain effects whereby migration opportunities increase educational investments and skill formation. Migration also has additional positive effects through trade and investment linkages, knowledge transfers, and changing social norms. This review also discusses policies for enhancing migration's development impacts and key areas for future research.
This article reviews recent evidence on how credit availability shapes exports. Advances in empirical strategies and the increasing availability of detailed firm- and transaction-level data shed light on mechanisms linking firms’ financial conditions to their entry, survival, and growth in export markets. Emerging work on the interaction between bank and trade credit highlights additional channels affecting export contracts. We conclude by outlining open questions and directions for future research.
This article uses inflation expectations to investigate the mechanisms that linked supply and demand shocks to inflation outcomes during 2021–2024. It describes several theoretical mechanisms through which shocks led to inflation, highlighting the role of expectations in this process. It uses multiple sources of expectations data for the United States, Euro area, and United Kingdom to evaluate each of these channels. Finally, it surveys the literature that has used expectations data to make sense of the 2021–2024 inflation surge. The article applies the results from this investigation to assess how well-anchored inflation expectations were during the surge and at the end of it.
Gender-based violence (GBV) and harassment remain widespread, with far-reaching consequences. This review synthesizes the emerging economics literature on GBV, highlighting its methodological challenges, economic impacts, and policy responses. We first examine the difficulties of measuring GBV, including underreporting, definitional variation, and the limits of administrative versus survey data. We then survey evidence on the economic costs of GBV, which span reduced employment, earnings, and educational attainment for survivors as well as broader harms to families, peers, firms, and societies. Finally, we review evidence on prevention and mitigation strategies, including deterrence through sanctions, shifts in workplace and social norms, and survivor support programs. The literature shows that the economic costs of GBV are large, persistent, and measurable, underscoring the urgency of rigorous policy interventions and continued research.
