The authors developed a classroom experiment on exchange rate determination appropriate for undergraduate courses in macroeconomics and international economics. In the experiment, students represent citizens from different countries and need to obtain currency to purchase goods. By participating...

Theoretical finance is essentially the study of inter-temporal arbitrage, but it is often interesting also to analyze relationships between asset prices. Cross-sectional analysis makes it possible to purge both field and laboratory data of unobservable changes in time-varying fundamentals. Also,...

This paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development, financial development, legal system development, government...

When estimates of variances are used to make asset allocation decisions, underestimates of population variances lead to lower expected utility than equivalent overestimates: a utility based criterion is asymmetric, unlike standard criteria such as mean squared error. To illustrate how to...