The U.S. trade deficit with China exceeded $200 billion in 2005. Many blame these imbalances on the value of the renminbi. This paper investigates how an appreciation of the RMB would affect the U.S. trade balance with China. Johansen MLE and dynamic OLS results indicate that the long run real...

Abstract This paper analyzes the relationship between stock prices, house prices and consumption using data for 16 OECD countries. The panel data analysis suggests that the long-run responsiveness of consumption to permanent changes in stock prices is higher for countries with a market-based...

Abstract This paper examines five possible explanations for the Great Recession of 2008 and 2009, using data for the United States and the eurozone. Of these five hypotheses, four are not supported by the data, while the fifth appears reasonable.

Purpose The purpose of this study is to examine the linkages between Australian house prices and stock prices under the Toda and Yamamoto test framework. Specifically, it investigated whether there is a capital switching effect between house prices and stock prices. Design/methodology/approach...

Purpose – The paper seeks to assess the impact of brand acquisition announcement on the wealth of the acquiring company's shareholders in India. Furthermore, announcement returns have been assessed and compared across FMCG versus pharmaceutical brand acquisitions and domestic versus cross...

Purpose – The wealth effect of accelerated stock repurchase (ASR) documented by previous studies is not as large as the authors would have expected. The authors believe that there are potentially important sampling problems in the previous studies, which make the results less reliable....

Thomas Grennes’s letter criticizing my article, "The Unsustainability of the US Trade Deficit," fails to distinguish between the trade deficit and the current account deficit, and therefore does not respond to my argument.

Abstract Almost all countries face the problems of trade balance, although they are more inherent in developing countries and economies in transition. A majority of economists adhere to a common opinion that real depreciation may lead to an improvement of trade balance. That said, countries...

Discusses a number of issues put forward by the other authors in this volume. In particular considers the potential role of real interest rates in unemployment models, the importance of the trade balance and related constraints in open economy models and the uniqueness and stability of...

Purpose – Previous research that investigated the effects of currency depreciation on the trade balance assumed that the adjustment of all variables in a given model is in linear fashion. The authors wonder if introduction of nonlinearity in the adjustment of some variables such as the...