The purpose of this paper is to identify the role of health status in productivity. In order to check the existence of reverse causation suggested by previous studies the Hausman test was carried out and different sets of instruments were used as exogenous determinants of health expenditure....

This note addresses some theoretical and econometric aspects of modelling addictive consumption. We show that the solution to the optimization problem leads to a specification of the reduced form equation which is different from what has been estimated in the literature. We also demonstrate that...

In macroeconomics, unemployment hysteresis typically arises as a special case of an otherwise stationary model. Imposing hysteresis is often equivalent to imposing a random walk, i.e. a situation in which the permanent fraction of a shock is equal to unity. This paper develops a more general...

This paper analyses a number of methods for trend estimation focusing on their ability to pick up turning points quickly at the end of a series. An application to the Bank of England flows M4 series is provided which shows that some of the proposed methods may be more reliable than others for...

When estimating the welfare gains from moving from 2% inflation to price stability, Feldstein assumes that the compensated demand curve for retirement consumption is linear. Lucas has argued, in the shoe leather costs literature, that money demand functions are best specified as log-linear...

The buffer-stock hypothesis is examined through a structural vector autoregression (SVAR) model across European Union (EU) countries. Variance decompositions do not provide uniform evidence in favour of the buffer-stock hypothesis in all case studies. The results are very important for the...

This note extends the Dixit-Pindyck analysis of investment, in the form of market entry and exit under sunk costs, to the case of heterogeneous sunk costs. The implication is that the market displays full hysteresis, in the form of remanence and dependence on the nondominated extremum values of...

We apply directed graphs to an empirical analysis of traffic occupant fatalities based on a model by Crandall. In this paper, we use Crandall's data on US traffic fatalities for the period 1947-81 and extend the sample to include 1982-93. Based on the 1947-81 annual data, directed graph...

This paper empirically tests for factors affecting infant mortality rates. Based on a crosssectional model (covering 117 countries for the year 1993) that corrects for heteroscedasticity, the results show that fertility rates, female participation in the labour force, per capita GNP, and female...

This paper analyses the fulfilment of the long-run PPP hypothesis between the Spanish Peseta and the currencies of the most important trade partners of the Spanish Economy. We show that the bilateral real exchange rate of the Spanish Peseta can be characterized as being stationary around a mean...