In this paper we propose a sequential method for determining the number of breaks in piecewise linear structural break models. An advantage of the method is that it is based on standard statistical inference. Tests available for testing linearity against switching regression type nonlinearity...

This paper attempts to examine empirically the impacts of the institutional changes on the Hong Kong's interest rate, and to evaluate the relative merit of rules versus discretion over three distinct regimes. Our result suggests that the stance of policy making is associated with stability of...