There are conflicting theories about the effect of real exchange rate movements on output growth. Expenditure switching models suggest that a real depreciation leads to an increase in net exports due to the increase in competitiveness of the export sector, and hence to an increase in output...

In this article we present a simple real business cycle (RBC) model, in order to show that these models capture many of the features of business cycles in the real economy. While these models are very abstract, we argue that they are a useful way of thinking about the macro-economy. RBC models...

There is a long literature examining the theoretical relationship between the rate of inflation and the size of the capital stock in an economy. This literature has produced varied predictions about the effects of inflation on the capital stock. In this paper we present some time series evidence...

We examine whether standard theoretical models of inflation forecast targeting are consistent with the observed behaviour of the central banks of Australia, Canada, and the United States. The target criteria from these models restrict the conditionally expected paths of variables targeted by the...

This paper presents evidence on whether Hong Kong's currency board arrangement, in place since 1983, has affected the volatility of real macroeconomic variables. Simple evidence on the relative volatilities of relevant macroeconomic variables, pre and post,1983 is presented, before a more formal...

In this paper business cycle correlations between countries in the Asia-Pacific region are examined. A number of authors have suggested that trade intensity between pairs of countries increases business cycle synchronisation, though theoretically it is not clear that this should be the case. In...

The paper presents a theory of the demand for money that combines a special case of the shopping time exchange economy with the cash-in-advance framework. The model predicts that both higher inflation and financial innovation - that reduces the cost of credit - induce agents to substitute away...