We present preliminary results of 1086 structured interviews about price setting behavior of the formal firms in the manufacturing and services sector of Pakistan. Our key discoveries are that frequency of price change is considerably high in Pakistan, lowering the real impact of monetary...

We present results of 1189 structured interviews about price-setting behavior of firms in the manufacturing and services sector in Pakistan. Our discoveries are that frequency of price change is considerably high, lowering the real impact of monetary policy. The remaining price stickiness is...

We apply an optimizing model with relative comparisons (habit formation) in consumption and labour supply to the economics of happiness, specifically the 'Easterlin paradox'. Studying a generalization of the paradox, which we label the 'happiness puzzle', we analyse ways in which income growth...

We assess the power of diverse Artificial Neural-Network (ANN) models as forecasting tools for monthly inflation rates for 28 Organization for Economic Co-operation and Development (OECD) countries. In the context of short out-of-sample forecasting horizon we find that, on average, the ANN...

Weak governance adversely affects firm’s net worth and consequently the value of its collateral. This negative impact on the collateral reduces the external credit available for importing inputs constraining potential output. As a result, a stronger procyclical monetary policy stance is...

We exploit exogenous variation in the amount of public information available to banks about a firm to empirically evaluate the importance of adverse selection in the credit market. A 2006 reform introduced by the State Bank of Pakistan (SBP) reduced the amount of public information available to...

Using detailed administrative Pakistani credit registry data, we show that banks with low leverage ratios are both significantly slower and less likely to recognize a loan as nonperforming than other banks that lend to the same firm. Moreover, we find suggestive evidence that this lack of...