There are three papers in this thesis. First two are on exchange rates and the third one tries to explain why people buy low-price shares and its effect on the market. Chapter one uses Stein's NATREX model to explain the real exchange rate of Hong Kong. It mainly answers two questions. First,...

This thesis includes three essays. The first two essays show that after the unification in Italy there was a great degree of monetary, economic and financial disintegration. Essay 1 concentrates on one aspect of monetary disintegration: the persistence of local pre-unification currencies. The...

It is generally accepted that a depreciation in the currency of one country increases foreign direct investment flows into that country. However, studies based on an option pricing approach and recent FDI flows data from Japan into the US suggest that the FDI flows may decrease as the currency...

The neoclassical assumptions of perfect competition and constant returns to scale are commonly used within most areas of macroeconomic research. This is generally true of existing research on business cycles and universally true of previous studies investigating the welfare benefits of taxation...

By incorporating curb market savings into a growth model, this study developed a unified view about financial development and economic growth, where McKinnon-Shaw school and neo-structuralists part each other. We demonstrate the ambiguous nature of the relationship between financial development...

This paper presents a theoretical model of exchange-rate determination intended to address the forward premium puzzle. It also explains the empirical observation that risk premiums depend on interest differentials. The model's closed-form solution indicates that currency risk premiums depend on...

Currency pegs seldom achieve full credibility even after delivering low inflation and a stable exchange rate for many years. We use unique survey data from Bulgaria's currency board to investigate the origins of incomplete credibility. We show that the limitations imposed by the currency board...

When introducing a new monetary regime designed to reduce inflation, does a central bank prefer more or fewer economic agents who form informed forecasts of inflation? The relevance of the question arises because the central bank can make a decision about how much information to disseminate...

International debt contracts can incorporate—at least implicitly—contingencies governing debt reduction. This paper examines a series of debt contracts that allow for the possibility of rescheduling, forgiveness, and rescheduling with forgiveness. The contract with both rescheduling and...