This paper investigates the effect of economic integration on the ability of firms to maintain a collusive understanding about staying out of each other's markets. The paper distinguishes among different types of trade costs: ad valorem, unit, fixed. It is shown that for a sufficient reduction...

This paper proposes a new empirical representation of US inflation expectations in a Stace-Space Markov-Switching framework in order to identify the expectations regimes which are associated with short and long term Phillips curves. Results suggest that the dynamics of in‡ation expectation...

Using weekly data for the period March 1991 to August 2002, we estimate the response of retail gasoline prices to changes in crude oil and spot gasoline prices in the US allowing for a possibility of two types of cost shocks to the gasoline market: long-term and short-term shocks. Our conclusion...

In this paper we demonstrate that there is evidence of an unstable and nonlinear re-lationship between fundamentals and exchange rates. Modeling this time-varying nature of the importance of fundamentals in a Markov switching framework substan-tially improves the fit of the real interest rate...

I study whether the effect of monetary policy has changed during 1990s and the zero bound of nominal interest rate may have some distortional effect on macroeconomic dynamics. In order to check the existence of structural change without any prior knowledge on break point and to be able to...