A central bank with private information about its preferences has an incentive to reduce its planned inflation to increase the public's perception of its inflation aversion and lower expected future inflation. A regime is said to be transparent if planned inflation is observable and reveals the...

OECD unemployment rates show long swings which dominate shorter business cycle components and these long swings show a range of common patterns. Using a panel of 21 OECD countries 1960-2002, we estimate the common factor that drives unemployment by the first principal component. This factor has...

In Keynes' General Theory, investment determines effective demand, which determines unemployment and the labour market plays a negligible role. In New Keynesian models, labour market institutions determine the natural rate of unemployment and the speed at which unemployment adjusts to it....

Given nominal exchange rates and price data on N + 1 countries indexed by i = 0,1,2,…, N, the standard procedure for testing purchasing power parity (PPP) is to apply unit root or stationarity tests to N real exchange rates all measured relative to a base country, 0, often taken to be the U.S....

This paper uses a large panel of data with up to 19 time-series observations for almost 150 countries to estimate models of arms imports. Qualitative evidence suggests a non-linear relationship. As income and military expenditure grow, the propensity to import first rises and then falls as a...

Using high frequency data for the price dynamics of equities we measure the impact that market microstructure noise has on estimates of the: (i) volatility of returns; and (ii) variance-covariance matrix of n assets. We propose a Kalman-filter-based methodology that allows us to deconstruct...

Realized variance option and options on quadratic variation normalized to unit expectation are analysed for the property of monotonicity in maturity for call options at a fixed strike. When this condition holds the risk-neutral densities are said to be increasing in the convex order. For...

In economics, most coauthored papers have all coauthors in alphabetical order. It is sometimes argued that this conveys advantages to people whose names start with letters that come early in the alphabet. This paper examines whether the alphabetical ranking of names affects someone's reputation....

Traditional cost based optimization models (WASP) for expansion planning do not allow for mark-to-market valuation and cannot satisfy arbitrage free requirements. This work will fill this gap by developing and estimating models for mark-to-market valuation. Furthermore the present paper examines...

The paper analyses the characteristics of the supply of higher education in different geographical macroareas using a strategic interaction framework. It focuses on universities operating in centralised funding system that autonomously set the quality of education showing that in equilibrium it...