It is shown in this letter that the magnitude of exchange rate overshooting is larger than in Dornbusch (1976) when chartists are introduced into the model. Also, the extent of overshooting depends inversely on the planning horizon. The latter follows from explicitly modelling the empirical...

We propose an extension of the often used rational addiction model. Our model includes both legal and illegal cigarettes. The model is tested on a Swedish data set covering the aggregate legal and illegal cigarette markets. When we treat legal and illegal cigarettes as independent demand...

This thesis consists of four papers. The first three deal with deterministic chaos in exchange rate series whereas the fourth deals with technical analysis in the foreign exchange market. Paper [i] (

How has the European monetary integration, with the creation of the EMU, affected the stability and volatility of foreign exchange? In order to answer this question, stability and volatility measures are defined and calculated. We then use these to investigate the changes in the stability and...

It is well-known that cigarette smoking and the use of other addictive goods is harmful to health. Still, some people smoke cigarettes and drink alcohol in their daily life. The consumption of addictive goods seems, therefore, to be the anti-thesis of rational behavior. In this paper, however,...

When modeling demand for addictive consumption goods, the most widely used framework is the rational addiction model proposed by Becker and Murphy (1988). In the present paper, we extend the rational addiction model to include two addictive consumption goods, alcohol and cigarettes. We estimate...

The purpose of this paper is to implement theoretically, the empirical observation that the relative importance of fundamental versus technical analysis in the foreign exchange market depends on the planning horizon. For shorter planning horizons, more weight is placed on technical analysis,...

We argue that it is not necessary for the central bank to react to the exchange rate to have a desirable outcome in the economy. Indeed, when the Taylor rule includes contemporane-ous data on the variables in the rule, the central bank can disregard from the exchange rate as long as there is...