Government is often considered the safe sector of an open economy that provides households with insurance against external risk exposure. Among highly integrated economies, however, households should be able to exploit common financial markets to insure themselves. In this paper we examine the...

Government is often considered the safe sector of an open economy that provides households with insurance against external risk exposure. Among highly integrated economies, however, households should be able to exploit common financial markets to insure themselves. In this paper we examine the...

Aggregate Output is a focal point of macroeconomics. In the empirical literature, a number of variables are used as a proxy for aggregate output. In this paper, we compare the temporal behavior of four monthly measures of aggregate output: namely GDP, ICI, IP, and XCI. These four measures of...

This study suggests that some empirical findings against money-output causality can be the consequence of ignoring autoregressive conditional heteroskedastic (ARCH) errors. Monte Carlo results confirm that ARCH effects drastically reduce the power of the standard causality test. The maximum...