The hypothesis that the forward rate is an unbiased predictor of the future spot rate has been rejected in many empirical studies. The rejection of this hypothesis could occur because market behavior is inconsistent with rational--expectations or because there exists a risk premium. Equations...

One advantage of a decentralized system of government is that it allows government expenditure and taxation to better suit local preferences for public goods. On the other hand, if income is uncertain, a centralized system that incorporates interregional transfers allows regions to share...