Variance of exchange rates around predictions can be from 1) undiscovered fundamentals, 2) efficient markets, 3) destabilising speculation, or 4) regime and personality differences in the heuristics used in the stage of evaluating alternatives. Field and experimental evidence identifies 4) as...

Conclusions favorable to flexible exchange rates typically accord with expected utility theory in ignoring the costs that exchange rate uncertainty generates for governments, central banks, firms and unions in: (i) choosing among acts; and (ii) existing until learning the outcome of the chosen...

In the decision-making process, there is a stage when choosers evaluate alternatives. Evaluation is complex especially when it involves the future exchange rate. In the complexity of predicting the future exchange rate, choosers may use prominent numbers and ratios. We furnish field and...

Government expenditure can be highly variable, if used as a countercyclical instrument, or as a response to economic crises or as a means of rapidly altering other features of the economy. An alternative policy setting is to keep government expenditure changes gradual and modest. It is shown...

Opinion is divided on whether it is better to have a single world money or variable exchange rates. Pope, Selten and von Hagen (2003) propose that fresh light would be shed via an analysis that allows for seven complexity impacts on the exchange rate that are underplayed (where not entirely...

The paper traces the dangers in the closed economy perspective of a monetary policy focused on a domestic inflation goal under a clean float. Field evidence of the damage wrought from this perspective is reinforced by that from a laboratory experiment. The laboratory experiment avoids...

This paper’s field evidence is: (1) many official sectors rapidly forget the damage of the 1982-85 exchange rate liquidity crisis and reverted to what caused that crisis, namely a closed economy clean floats perspective; and (2) the 2006-2008/9 exchange rate liquidity shock would have been more...

The prior paper in this sequel, Pope (2009) introduced the concept of a nominalist heuristic, defined as a focus on prominent numbers, indices or ratios. In this paper the concept is used to show three things in how scientists and practitioners analyse and evaluate to decide (conclude). First,...