The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to waiting. So although circumstances may suggest that it is profitable to invest, there may also be an...

The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to waiting. So although circumstances may suggest that it is profitable to invest, there may also be an...

The adoption of inflation targets by a number of industrialised countries in the last decade has reawakened interest in the study of rules to characterise monetary policy. In the literature a clear distinction is drawn between instrument rules, such as that of Taylor, which are backward looking,...

Following a conjecture of Kozicki and Tinsley (2002) we generalise the habit formation model of consumption to allow for both a multiplicative utility function and a habit-aspiration function which is a geometrically weighted average of past consumption. The geometric form of the aspiration...

Following a conjecture of Kozicki and Tinsley we generalises the habit formation model of consumption to allow for both a multiplicative utility function and a habit\aspiration function which is a geometrically weighted average of past consumption. The geometric form of the aspiration function...

A multiplicative form of the habit term in the utility function has some undesirable properties if the habit function is itself still additive (Wendner, 2003). A geometric form for the way the stock of habit accumulates can resolve these shortcomings.