It is now well known that standard asymptotic inference techniques for instrumental variable estimation perform very poorly in the presence of weak instruments. Specifically, standard asymptotic techniques give spuriously small standard errors, leading investigators to accept apparently tight...

No abstract.

This paper proposes a new approach for detecting the number of structural breaks in a time series when estimation of the breaks is performed one at the time. We consider the case of shifts in the mean of a possibly nonlinear process, allowing for dependent and heterogeneous observations. This is...

New empirical evidence with regards to the effectiveness and efficiency of Chile's capital controls is provided here, based on more and better data on the range of controls and a broad assessment of their costs and benefits. The paper concludes that capital controls have been partially effective...

Survey studies on exchange rate expectations tend to reject the rational expectations hypothesis for longer horizons. Extrapolative, adaptive and regressive expectations have been tested as alternatives, usually rejecting static expectations. The purpose of this paper is to investigate the...

No abstract.

We investigate the effect of introducing costs of complexity in the n -person unanimity bargaining game. In particular, the paper provides a justification for stationary equilibrium strategies in the class of games where complexity costs matter. As is well-known, in this game every individually...

Floating exchange rates display substantial short-run volatility causing a nontrivial information problem in disentangling temporary from permanent changes. Although agents observe current market signals they are imperfectly informed about the future, but they accumulate information and learn...

The standard economic model of decision making assumes a decision maker makes her choices to maximize her utility or happiness. Her current emotional state is not explicitly considered. Yet there is a large psychological literature that shows that current emotional state, in particular positive...

No abstract.