For instance, Rodrick and Subramanian, in an IMF working paper of 2004, point out that India seems to have a large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins, and Arvind Virmani (2007) confirms this trend.
There was also a credit-rationing channel based largely on the work of another Franco graduate student, Dwight Jaffee, who is now an authority on government-sponsored enterprises at Berkeley. What we didn’t have in those days was forward-looking expectations behavior. In qualitative terms we all knew the difference between adaptive and rational expectations, but nobody knew how to estimate rational expectations equations.