In this note the implications of modelling uncertainty in the parameters of the central banks loss function are examined in a multiplicative rather than additive manner. The implications for expected inflation, linear inflation contracts and targets are derived.

The degree of convergence in fiscal pressure registered in the European Union during the 1967-94 period is studied. To that end, OECD data is used and both the traditional cross-sectional convergence indicators and the time series analysis of the longrun properties of the data set are examined.

The paper investigates the nature of the relationship between stock prices and interest rates, using the cointegration and co-dependence techniques. Using data for the G-7 economies, the evidence suggests that in general stock prices and interest rates do not exhibit a long-run common trend, but...

Value-added taxes (VAT) have increased in a number of developed economies in recent years. The shift towards consumption taxes in general and VAT in particular has made it a politically sensitive tax. While it is generally accepted that an expenditure tax such as VAT is less distortionary and...

The relationship between employment news and exchange rates in five European Union (EU) countries is investigated over the period 1980 to 1996. The empirical evidence reveals that employment news has a negative impact on bilateral exchange rates with respect to the Deutschmark (DM) in all cases...

This paper utilizes a VAR model to analyse the extent of interdependency of equity markets in Latin America. The results from estimating impulse response functions suggest that there are strong linkages between the equity markets of Mexico and the US, and weaker but significant linkages between...

A switching regression approach with imperfect sample separation information is used to determine convergence clubs. Regime classification allows one to determine which countries belong to the related convergence clubs. Initial per capita GDP does not provide a perfect sample separation...

This paper presents implied continuous time lag distributions of the main UK economic variables obtained from recent estimates by Nowman of the Bergstrom, Nowman and Wymer continuous time dynamic macroeconometric model of the UK economy. The lag distributions provide further evidence of the...

Previously, it has been shown that the profits from a simple market timing trading rule applied to a portfolio of shares can be affected by the inter-relationships between the returns of the component securities. In this short letter, the results from applying a more sophisticated 'filter' rule...

The empirical work and interpretation of the results of Al-Loughani and Chappell (1997) is commented upon. On the basis of the reported results, and contrary to the authors' conclusion, it is argued that although the random walk hypothesis is rejected, the weak-form market efficiency hypothesis...