Empirical fiscal policy reaction functions based on ex post data cannot be said to describe fiscal policymakers intentions, since they utilise data which did not exist when their decisions were made. A characterisation of what fiscal policymakers were trying to do requires real time data. This...

Following the Maastricht criteria, a country seeking to join the European Monetary Union cannot have inflation in excess of 1.5 percent plus the average inflation in the three "best performing" EU countries. This inflation reference value is a non-increasing function of the number of EU members....

This paper develops a simple framework for describing fiscal policy where policymakers attempt to minimise deviations in output and budget balance from target values. Optimal policy is given by minimising a quadratic loss function subject to a linear structure of the economy. This policy can be...

We estimate a reaction function for the European Central Bank (ECB) using forecasts of economic growth and inflation as regressors. We detect a shift after Lehman Brothers failed in September 2008 when the pre-crisis reaction function indicates that the zero lower bound may become a constraint....

In a world of perfect markets, primary insurers could hedge catastrophic risks using financial instruments. In practice however, most primary insurers deal with catastrophic risk by the use of a financial intermediary - a reinsurer. This paper uses insights gained from the institutional...

According to the Maastricht Treaty, a country seeking to join the European Monetary Union cannot have an inflation rate in excess of 1.5 per cent plus the average inflation rates in the three 'best performing' EU countries. This inflation reference value is a non-increasing function of the...