Economists have long conjectured that movements in stock prices may involve speculative components. This bubble, as it is usually referred to, is defined as the difference between the market value of a security and its fundamental value. Although there are several important theoretical issues...

This paper uses sophisticated empirical methodology to measure the interconnectedness of financial institutions in five developed economies – France, Germany, Japan, UK and USA – for the period January 2000 to November 2009. The study goes beyond the conventional use of first and second...

In this paper we consider two new independent variables as inputs to the Taylor Rule. These are the equity and housing momentum variables and are introduced to investigate the potential usefulness of these two variables in guiding the Fed to lean against potential bubbles. Such effectiveness...

This paper considers several important macroeconomic variables such as inflation, Federal funds rates and unemployment along with behavioral variables such as momentum trading to explain excessive U.S. equity returns during the post World War II era. The theoretical hypotheses propose three...

This paper considers several important macroeconomic variables such as inflation, federal funds rates and unemployment along with behavioral variables such as momentum trading to explain excessive U.S. equity returns during the post World War II era. The theoretical hypotheses propose three...