It has been argued that the Bretton Woods system (of pegged but adjustable exchange rates) set up after World War II was designed specifically to prevent the manipulation of exchange rates in pursuit of national macroeconomic objectives (see R. Cooper) ; so it is perhaps no coincidence that the...

In this paper we solve for the optimal (Stickler) policy in a model of credibility and monetary policy developed by Cuckierman and Meltzer (1986). Unlike the (Nash) solution provided by Cuckierman and Meltzer the dynamic optimisation problem facing the monetary authority in this case is not a...

A specification test based on an Edgeworth expansion is proposed and some of its useful properties are noted. In particular the test has an important additivity property, in that a test for higher-order alternatives simply adds additional, asymptotically independent variates to tests lower order...

Most macroeconometric models are built with the objective, wholly or partly, of providing forecasts. The term "forecast" covers three rather distinct types of exercise : (a) genuine "ex-ante" forecasts, in which the model user predicts the actual future development of the economy, and for which...

The interface between economic theory and applied econometrics is often one of uneasy compromise, with the pragmatic justification for many accepted procedures resting on a theoretical base. This paper examines the surprisingly strong arguments that exist in terms of economic theory, for the use...