We address the fundamental issues of existence and efficiency of an equilibrium in a Ramsey model with many agents, where agents have heterogenous discounting, elastic labor supply and face borrowing con- straints. The existence of rational bubbles is also tackled. In the first part, we prove...

We address the issues of existence of Ramsey equilibrium under bor- rowing constraints and occurrence of rational bubbles. First, we consider a time-truncated economy. Since the feasible allo- cations sets of our economy are uniformly bounded, we prove that there exists an equilibrium in a...

The nexus between stock return and inflation is assessed for Pakistan using the methodology of frequency based causality and continuous wavelet transform over a long sample period 1961:M07 - 2012:M02. The preliminary investigation using the frequency based causality suggests interdependence of...

Conventional approaches to examining the expectation hypothesis of interest rates assume a parametric linear specification among variables. In contrast, this paper tests the hypothesis using a flexible nonlinear inference approach proposed by Hamilton (20

This paper aims to study the performance of Islamic finance regarding that of conventional finance over the last decade. This question is particularly interesting as within the current financial crisis, conventional finance is being rather ineffectual and risky and that in the same time one can...

In this paper, we aim to investigate whether investor following is a determinant of the stock

We consider a general equilibrium model with heterogeneous agents, borrowing constraints, and exogenous labor supply. First, the existence of intertemporal equi- librium is proved even if the aggregate capitals are not uniformly bounded above and the production functions are not time invariant....

Money demand specifications exhibits instability, especially for long spans of data. This paper reconsiders the welfare cost of inflation for the US economy using a flexible timevarying cointegration methodology to estimate the money demand function. We find evidence that the time-varying...

This paper investigates the causal relationship between asset prices and per capita output across 50 US states and the District of Columbia over 1975 to 2012. A bootstrap panel Granger causality approach is applied on a trivariate VAR comprising of real house prices, real stock prices and real...

This paper investigates whether changes in monetary transmission mechanism respond to variations in asset prices. We distinguish between bull and bear markets and employ a TVP- VAR approach with stochastic volatility to assess the evolution of the monetary policy in relation to housing and stock...