The paper asks why indexation of debits is not typically observed in the UK housing market. Indexation ensures that real debits change only if the real rate of interest alters and eliminates the problem of front end loading or the tilt. The typical British repayment mortgage and the index linked...

This paper seeks to characterise optimal monetary policy rules in the presence of risk and uncertainty. I explore a situation in which the true parameters and the true structure of the economy are unknown to the policymaker, and he is reluctant to make a decision based on a single distribution...

With the advent of New Labour, numerical targets have become ubiquitous in the public sector. They are used to monitor and assess performance by government agencies; but how helpful are targets if couched only in numerical terms? In this paper the proposition is that targets must be set in...

Kim et al. (2002) demonstrate that the Dickey-Fuller unit root test can experience severe size distortion when a large decrease in the innovation variance occurs early in the sample period, leading to spurious rejection of the null. We extend this analysis to the case of spurious identification...

In 1957, Farrell proposed to measure technical (in)efficiency as the realised deviation from a frontier isoquant. Since then, the research has developed several methods to derive the production frontier and it has also extended its scope in applying frontier techniques to the measurement of...

A complete characterization of economies with the nonsubstitution property is presented for linear models. In this characterization, a degree of proper joint production as well as the existence of durable capital goods is allowed for.

From an optimizing framework, the median voter?s demand for public goods is derived and estimated using data pertaining to the economy of Mauritius over the period 1970-1999. Empirical findings reveal that a long run relationship exists between the quantity demanded of public goods and the...

This article examines the extent to which actual crop insurance indemnification behaviour conforms to the theoretical predictions of two ex post moral hazard models ? costly state verification and costly state falsification ? and then explores whether the closely conforming model can indeed help...

We estimate a model that incorporates two key features of business cycles, comovement among economic variables and switching between regimes of boom and slump, to quarterly UK data for the last four decades. Common permanent and transitory factors, interpreted as composite indicators of...

This paper provides the latest research developments in the method of choice experiments applied to valuation of non-market goods. Choice experiments, along with the, by now, well-known contingent valuation method, are very important tools for valuing non-market goods and the results are used in...