This paper develops a model for the forward and spot exchange rate which allows for the presence of a Markov switching risk premium in the forward market and considers the issue of testing the unbiased forward exchange rate (UFER) hypothesis. Using US/UK data, it is shown that the UFER...

Despite intensive investigation, little evidence has been found for a traditional Richardson style arms race between Greece and Turkey using regression methods. This paper uses an alternative model of the arms race, which treats it as a simple repeated two by two game like Prisoners' Dilemma, in...