In 1994 the Federal Reserve System moved to a more transparent reporting of monetary policy. In this paper we first discuss the various sources of uncertainty that play an essential role in the formulation and conduct of monetary policy and evaluate the degree of uncertainty faced by monetary...

Economists have long conjectured that movements in stock prices may involve speculative components. This bubble, as it is usually referred to, is defined as the difference between the market value of a security and its fundamental value. Although there are several important theoretical issues...

This paper argues that the global monetary system has exhibited significant instability since the collapse of the Bretton Woods regime in 1971. The recent challenge for economists and policy makers is the creation of a global monetary system that offers greater exchange rate stability without...

Numerous studies have estimated U.S. stock market returns measured by various indexes such as the Samp;P 500 Index over certain periods. The purpose of this paper is twofold: first we calculate, under certain scenarios, the final total accumulation of a representative individual who invests a...

The phenomenal growth of individual retirement accounts in the U.S., and globally, challenges both individuals and their advisors to rationally manage these investments. The two essential differences between an individual retirement account and an institutional portfolio are the length of the...

This paper links the bursting of the housing asset price bubble around 2007 in the U.S. to the instability that arose in financial markets with the bankruptcy of Lehman Brothers in September 2008, and both of these to the Great Recession and the unconventional monetary policy that followed....

The North American Free Trade Agreement (NAFTA) - an extension of the Free Trade Agreement (FTA) between Canada and USA to include Mexico - went into effect on January 1, 1994, primarily as an agreement to eliminate restrictions on trade and investment over the course of twelve years. NAFTA is a...

The purpose of this paper is to develop certain relatively recent mathematical discoveries known generally as stochastic calculus, or more specifically as Ito's Calculus and to also illustrate their application in the pricing of options. The mathematical methods of stochastic calculus are...

Since the collapse of the Bretton Woods Global International System in 1971, the world economy has experienced significant currency volatility. The major economies of the world have addressed such volatility differently. The EU has chosen to follow a monetary union and introduced successfully a...

The celebrated Taylor Rule methodology has established that the decisions made by the Federal Open Market Committee concerning possible changes in short term interest rates reflected in Fed Funds are influenced by deviations from a desired level of inflation and from potential output. The Taylor...