The paper presents a general method for estimating a country's level of fundamental house prices and its interaction with actual house prices. We set up a unified empirical model which can be used to analyze the time-series behavior of the fundamental house price and to test various hypotheses...

We develop an alternative test of the `German view' - that a reduction in government consumption may lead to an immediate private consumption boom - derived from an open-economy permanent income model. In our empirical study we find, in accordance with the `German view', that an anticipated...

We suggest that the real exchange rate between the major currencies in the post-Bretton Woods period can be described by a stationary, two state Markov switching AR(1) model. Based on the forecast performance, both in-sample and out-of-sample, we find that this model out-performs two competing...

This paper examines the characteristics of business cycles within and across thirteen countries for more than a century of observations adopting a monetary regime perspective. We search for empirical regularities of business cycle fluctuations during three monetary regimes; the classical gold...

We investigate whether fiscal rules help to reduce the extent of policy procyclicality—how government expenditure policy responds to GDP-- in a dynamic panel framework with 81 advanced, emerging and developing countries over 1985–2012. We construct two new fiscal rule indices and investigate...

This paper examines the relationship between financial instability and monetary policy within the Swedish economy. Based on a standard VAR model of monetary policy extended to include measures of financial instability and credit expansions, we examine the interaction between monetary policy and...

We develop an alternative test of the 'German View' that fiscal contractions may lead to immediate consumption booms derived from a form of an open-economy permanent income model where we add uncertainty over whether shocks are permanent or transitory. Using a time-series statistical...

This paper examines the implications for the Nordic Countries (Denmark, Finland, Norway and Sweden) of participating in the finan stage of the European Monetary Union. Economic linkages with Germany are estimated using a time series approach under both the Bretton Woods and the post-Bretton...