We consider whether the introduction of the psychological concept of loss aversion into agents' preferences could generate a macroeconomic model in which changes in the money supply can have real, persistent effects. It is demonstrated that the macroeconomic implications of loss aversion depend...

This paper estimates a simple consumption-smoothing model of the French current account, and examines its capacity to predict recent developments in France's external performance.

A dynamic computable general equilibrium (CGE) model is constructed for the current Chinese economy. The model incorporates key dynamic features into the framework of a comparative static CGE model. The model is capable of tracking, at micro-level, the sectoral responses of various endogenous...

This paper investigates the implications for Australian households of a carbon tax, using the input-output approach developed by Simons et al. (1994) and adapted by Cornwell and Creedy (1997). In these studies the carbon dioxyde reduction is generated by demand changes resulting from the...

Many empirical income distributions are complicated by the existence of a second mode, found in the lower range of incomes. This phenomenon can be generated by the labour supply effects of means-tested transfer payments and the associated high effective marginal tax rates which have strong...

In this paper, we use data from a survey of taxi drivers in Singapore to test two competing labor supply hypotheses: the standard intertemporal model and the income targeting model, where workers set an earnings target over some short time horizon. The former predicts positive wage elasticities...

Recent studies suggest that the term premia within the U.S. Term Structure of Interest Rates may be adequately characterised as univariate GARCH (1,1)-M processes, with highly persistent or even potentially explosive conditional variances. Tzavalis and Wickens (1995) using data over the period...

This working paper describes two well-known approaches to finding an approximate solution to a real business cycle model: solving a linear-quadratic approximation to a social planning problem; and solving a linearized version of the equilibrium conditions of the model.