We propose a simple and powerful method for determining the transition process in continuous-time DSGE models under Poisson uncertainty numerically. The idea is to transform the system of stochastic differential equations into a system of functional differential equations of the retarded type....

In ESTAR models it is usually difficult to determine parameter estimates, as it can be observed in the literature. We show that the phenomena of getting strongly biased estimators is a consequence of the so-called identification problem, the problem of properly distinguishing the transition...

We consider a recently proposed class of nonlinear time series models and focus mainly on misspecification testing for models of such type. Following the modeling cycle for nonlinear time series models of specification, estimation and evaluation we first treat how to choose an adequate...

We take issue with the argument expounded, among others, by Layard (2006, Economic Journal) that status-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of status imposes on others. In a model where status depends...

In this paper Tabellini's and Alesina's (1990) median voter model for the explanation of budget deficits is modified by endogenizing the private sector. Debt finance is supplemented by taxing a private consumption which serves as an additional source of revenue for funding the public sector. The...

Let S=(S_t), t=0,1,...,T (T being finite), be an adapted R^d-valued process. Each component process of S might be interpreted as the price process of a certain security. A trading strategy H=(H_t), t= 1,...,T, is a predictable R^d-valued process. A strategy H is called extreme if it represents a...

During the last year, the research field of spatial economic has rapidly increased. There is consensus thatthe economic performance of a region depends not only on its own potential, but also on the development of their neighbouring regions. Knowledge spillovers, which are non constant over...

Innovation is the major driver of economic growth and development. To analyze innovation processes the restriction of a framework suited to the analysis of innovation towards the industrial sphere of an economy is not sufficient because of the important co-evolutionary dimensions of innovation....