Convergence and synchronisation of business and growth cycles are important issues in the efficient formulation of euro area economic policies, and in particular European Central Bank (ECB) monetary policy. Although several studies in the economics literature address the issue of synchronicity...

This paper examines the long-run and short-run relationship between Foreign Direct Investment (FDI) inflows, exports, and economic growth in Sri Lanka over 1980-2016. The study implies Autoregressive Distributed Lag (ARDL) bounds testing approach to reveal the relationship between the variables....

We analyze investment decisions when information is costly, with and without delegation to an agent. We use a rational-inattention model and compare it with a canonical signal-extraction model. We identify three "investment conditions". In "sour" conditions, no information is acquired and no...

This article analyses the frequency components of European business cycles using real GDP by employing multiresolution decomposition (MRD) with the use of maximal overlap discrete wavelet transforms (MODWT). Static wavelet variance and correlation analysis is performed, and phasing is studied...

The mathematical literature has developed a large pool of topological concepts and theorems for dynamic systems analysis. The aim of our paper is to make a first step towards the application of these concepts and theorems in the analysis of (long-run) structural change (in the three-sector...

This paper extends the Lucas (1978) model of firm formation by taking into account a normalised CES function in the production process. In a general equilibrium framework it is proved that there is an inverse relation between the value of the elasticity of substitution and average firm size....

Functions or “functionings” enable to give a structure to any activity and their combinations constitute the capabilities which characterize economic assets such as work utility. The basic law of supply and demand naturally emerges from that structure while integrating this utility within...

A model of growth with endogenous innovation and distortionary taxes is presented. Since innovation is the only source of volatility, any variable that influences innovation directly affects volatility and growth. This joint endogeneity is illustrated by working out the effects through which...

Wavelet analysis, although used extensively in disciplines such as signal processing, engineering, medical sciences, physics and astronomy, has not yet fully entered the economics discipline. In this discussion paper, wavelet analysis is introduced in an intuitive manner, and the existing...