The paper compares the cyclical behaviour of the Greek economy to that of the other EC economies, using quarterly and annual data since 1960 and the Real Business Cycle model as a theoretical framework. The evidence suggests that there are remarkable similarities in these features despite...

As the tenth anniversary of EMU is approaching, a debate is underway as to whether the single currency has promoted or hindered convergence among the countries of the Eurozone. On the one hand, there is wide agreement on the fact that asymmetric shocks have subsided after the creation of the...

As the tenth anniversary of EMU is approaching, a debate is underway as to whether the single currency has promoted or hindered convergence among the countries of the Euro Area. On the one hand, there is wide agreement that asymmetric shocks have subsided after the creation of the single...

The paper re-examines the efficiency hypothesis in the foreign exchange market. The traditional efficiency testing equations are reviewed and a model is developed that incorporates Bayesian revisions in the form of devaluation expectations. A number of propositions regarding the pattern of the...

This paper proposes and applies to the London Business School (LBS) model a general methodology for the design of macroeconomic policy using large rational expectations models. Design proceeds through the following four stages: first, a small, linear representation of the original large,...

This paper investigates the relation between the rise in external debt and fiscal developments in Greece. We use an intertemporal model of optimal private-sector savings to argue that stabilization of the public debt/GDP ratio will be sufficient to stabilize the external debt/GDP ratio as well....

An investigation of the problems of policy formation has to take account of the way in which expectations may be formed. The assumption of rationality is often made on the grounds that there is no reason to assume that views of the future display any particular bias. Some authors take this...

The paper discusses the process of financial liberalization in Greece and the impact it is likely to have on the conduct of monetary policy. To examine the effectiveness of exchange rate controls in Greece during periods of intense downward pressure on the drachma, we study the behaviour of...

This paper re-examines the standard ‘unbiasedness’ hypothesis in foreign exchange markets, according to which the forward premium should be an unbiased predictor of the future change of the spot exchange rate. If traders are heterogeneous, they may consist of ‘fundamentalists’ who...