This thesis examines certain key problems that the existence of forward rational expectations poses for policy analysis. The separate stages of estimating, testing and solving an econometric model are dealt with in turn. The main body of original work is in chapters four and six. In chapter four...

Chapter 2, titled "Hotelling Tax Competition" shows how competition among governments for mobile firms can bring about excessive differentiation in levels of taxation and public good provision. Hotelling's Principle of Minimum Differentiation is applied in the context of tax competition and...

In this Thesis we study some aspects related to the determinants and the consequences of acquiring education in the UK. Chapter one outlines the structure of the Thesis. In chapter two we analyse the probability of staying-on at school at age 16 in England and Wales using data from the 1970...

In this article, we presented evidence that people are more risk averse when investing in financial products in the real world than when they make risky choices between gambles in laboratory experiments. In order to provide an account for this discrepancy, we conducted experiments, which showed...

This thesis consists of four main chapters, together with a general introduction and conclusion. The thesis examines, both separately and together, the formation of trade blocs and global market integration. All the models use a partial equilibrium framework, with firms competing as Cournot...

Although most macroeconomists agree that the control of inflation may involve losses of output, there is no consensus about why. New Classical economists, focusing on the issue of credibility, have identified incentive problems as important obstacles to price stability. On the contrary, many new...

Forecasting is central to economic and financial decision-making. Government institutions and agents in the private sector often base their decisions on forecasts of financial and economic variables. Forecasting has therefore been a primary concern for practitioners and financial econometricians...

The current literature does not provide efficient models for commodity prices and futures valuation. This inadequacy is partly due to the fact that the two main streams of the literature - structural models and reduced form models - are largely disjoint. In particular, existing structural models...

We compare a number of methods that have been proposed in the literature for obtaining h-step ahead minimum mean square error forecasts for SETAR models. These forecasts are compared to those from an AR model. The comparison of forecasting methods is made using Monte Carlo simulation. The Monte...

We propose an exchange rate model that can explain both the observed volatility and the persistence of real and nominal exchange rate movements and thus in some measure resolves Rogoff?s (1996) purchasing power parity puzzle. Our analysis reconciles the well-known difficulties in beating the...