There are a number of major anomalies that arise from forward foreign exchange rates. Though the level of the forward rate is an unbiased predictor of the future spot rate, the forward premium is poor predictor of future spot rate changes; speculative profits are so volatile that implausibly...

The "German view" of expansionary fiscal contractions is that the expansionary expectional effect would outweigh the Kynesian effect of a sever government spending cut. This view relies on consumers behaving according to the permanent income hypothesis; who see spending custs as signals to...

In this paper we ask why was there a consumption boom in Ireland in the late 1980s? We put forward an expalnation, namely, that worsening borrowing conditions led agents to conume more out of disposable income. We explicityly model the economy as consisting of two types of consumers. One type...

A real options model is used to explain why Irish farmers have been slow to switch from traditional farming to forestry despite numerous government incentives. In the theoretical model our results depend on profits from traditional farming relative to forestry. Under reasonable parameterisations...

Commonly used linear-quadratic solution methods to nonlinear models are described in detail using a closed economy real business cycle model as an illustration. We find that all method yield identical coefficients on optimal decision rules. Some methods are easier to use in economies where...

In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. We show that the estimated return to formal education is sensitive to the inclusion of literacy - excluding it biases the return to education in...

This paper exploits an unusual policy reform that had the effect of reducing the direct cost of schooling in Ireland in the late 1960’s. This gave rise to an increased level of schooling but with effects that vary substantially across family background. This interaction of educational reform...