In an earlier paper "Granger-causality and Policy Effectiveness" Economica (1984), I showed that for a policy instrument x to Granger-cause some target variable y it is not necessary for x to be useful in controlling y. (The argument that it is not sufficient was already familiar, e.g. from the...

The empirical relationship between money and output is one of the most studied issues in macroeconomics, and a large literature has examined the causal links between monetary variables and output. One puzzle from this literature is that the results of causality tests appear to be sensitive with...

It is well known that temporal aggregation has adverse effects on Granger causality tests. Time series are often sampled at different frequencies. This is typically ignored, and data are merely aggregated to the common lowest frequency. We develop a set of Granger causality tests that explicitly...

Recent empirical tests of dynamic optimal seigniorage models focus on their `smoothing' and long-run implications. The models also imply that the optimal policies are forward looking; that is seigniorage revenues depend on expected future government expenditures. We report causality tests of...

The Paper presents a model in which the exogenous money supply causes changes in the inflation rate and the output growth rate. While inflation and growth rate changes occur simultaneously, the inflation acts as a tax on the return to human capital and in this sense induces the growth rate...

Although recent research has repeatedly found a negative association between investment and political instability, the existence and direction of causality between these two variables has not yet been investigated. This paper empirically tests for such a causal and negative long-run relationship...

This paper studies the dynamics of violence in the Palestinian-Israeli conflict since the outbreak of the Second (or 'Al-Aqsa') Intifada in September 2000, during which more than 3,300 Palestinians and more than 1,000 Israelis have been killed. The conflict has followed an uneven pattern, with...

The countries of Central and Eastern Europe have displayed widely disparate trade performance since the beginning of the transition. The Czech Republic and Hungary have had some success moving into the production and export of more technologically-sophisticated, higher value-added goods, while...

This Paper examines the relationship between foreign ownership and productivity, paying particular attention to two issues neglected in the existing literature – the role of multinationals in service sectors and the importance of R&D activity conducted by foreign multinationals. We review...