The Phillips curve has generally been estimated in a linear framework which implies a constant relationship between inflation and unemployment. Lately there have been several studies which claim that the slope of the Phillips curve is a function of macroeconomic conditions and that the...

This paper analyses how optimal policy responses to productivity shocks change when the government loses the exchange rate as a policy tool after entering a monetary union. It is shown that over the business cycle (generated as cyclical changes in productivity), both deficit and inflation will...

The implementation of the 1950 Swedish comprehensive school reform was preceded by a unique social experiment. During this experiment between 1949 and 1962 the new school system was implemented in stages. This allows us to study the same cohort of individuals going through two different school...

Moldova holds the unenviable distinction of having suffered the largest fall in GDP and living standards among the former socialist countries in Europe. By mid-1999 GDP had fallen to less than 30 per cent of its level in 1990, while living standards had plummeted from a situation of relative...

The price adjustment coefficient model of Amihud and Mendelson (1987) is shown to be suitable for estimation by the Kalman filter. A techique that, under some commonly used conditions, is asymptotically efficient. By Monte Carlo simulations it is shown that both bias and mean squared error are...

In theory, prices of current-month federal funds futures contracts should reflect market expectations of near-term movements in the Federal Reserve's target level for the federal funds rate. However, empirical results show that such measures of market expectations are too noisy to predict...

General equilibrium analyses of layoff costs have had mixed messages on the implications for employment. This paper brings out the economic forces at work in different frameworks and explains the disparate results. Since private agents perceive layoff costs as equivalent to a less productive...

In this paper we consider a general first-order power ARCH process and, in particular, a special case in which the power parameter approaches zero. These considerations give us the autocorrelation function of the logarithms of the squared observations for first-order exponential and logarithmic...

The pattern of trade between nations is well understood, but much less is known about firm level determinants to export: why do some firms start to export while others continue to produce for the domestic market? One reason for different firm strategies could be that the fixed costs for export...

In this paper, I try to shed some new light on the "puzzle" why the Lucas critique, believed to be important by most economists, seems to have received very little empirical support. I use a real business cycle model to verify that the Lucas critique is quantitatively important in theory, and to...