Aggregate consumption growth risk explains why low interest rate curren- cies do not appreciate as much as the interest rate di®erential and why high interest rate currencies do not depreciate as much as the interest rate di®er- ential. Domestic investors earn negative excess returns on low...

In most contemporary economies loan contracts cannot mandate imprison- ment or other non-pecuniary punishments for defaulting debtors. A possible rationale for contracting restrictions of this type is that imprisonment imposes negative externalities on individuals not party to the original loan...

Public debates on electricity policy in Hong Kong focus on the regulation regime but sel- dom discuss the macroeconomic impact. In this paper, we use the novel dataset on electricity consumption and report the following ?ndings: (1) there is a long run equilibrium relationship between real GDP...

We consider the CUSUM of squares test in a linear regression model with general mixing assumptions on the regressors and the errors. We derive its limit distribution and show how it depends on the nature of the error process. We suggest a corrected version that has a limit distribution free of...

This paper presents a model that reproduces the uncovered interest rate parity puzzle, based on a time-varying business-cycle related risk premium. Agents have preferences with external habits. During bad times in the home market, when the domestic habit is close to domestic consumption level,...

Conflicts of interest between insiders (e.g, controlling shareholders) and outsiders (e.g., minority shareholders) are central to the analysis of modern corporation. In an integrated continuous-time contingent claims framework with imperfect corporate governance, we examine a controlling...

In previous work Reddy and Pogge have argued that inter-country comparisons of income poverty based on poverty lines uniformly re?ecting the costs of the basic requirements of human beings are superior to the existing money-metric approaches. In this exercise, we implement a uniform approach to...