Most OECD central banks implement monetary policy by supplying reserves to the banking sector with the aim of influencing short-term interbank interest rates. To interpret the monetary policy stance accurately, one needs to be familiar with the mechanism for determining the money market...

To promote the financial stability, there is a need for an early warning system to signal the formation of asset price misalignments. This research provides two novel methods to accomplish this task. Results in this research shows that the conventional unit root tests in modified forms can be...

Tests for unit roots in log dividend yields, which are consistent with ‘rational bubbles’ in stock prices, are conducted for the S&P500 and Finnish stock market indexes. In addition to the traditional unit root tests, we split the data into 10-year segments and use frequency domain analysis...