Using U.K. data, the rational expectations permanent income hypothesis is rejected due to the predictive content of consumer confidence and not labor income or any other macroeconomic variable. The authors provide evidence suggesting that this cannot be explained by liquidity constraints and...

This paper examines the connection between the business cycle, nonlinearities, and asymmetries in the U.K. labor market. The economy is shown to display cyclical asymmetries; stochastic properties of variables such as employment, unemployment, real wages, and the unemployment-vacancy ratio...

This paper considers the causes of postwar U.K. business cycles. Using an extended stochastic growth model the authors construct estimates of productivity and preference shocks both of which are highly persistent, volatile and potentially capable of explaining U.K. business cycles. They find the...

We examine the implications of treating seasonality as an unobserved component which changes slowly over time. This approach simplifies the specification of dynamic relationships by separating non-seasonal from seasonal factors. We illustrate this approach using the consumption model of Davidson...

Assuming the role of debt management is to provide hedging against fiscal shocks we consider: ("i") what indicators can be used to assess the performance of debt management? ("ii") how well historical debt management policies have performed ("iii") how performance is affected by variations in...

I review the two most popular explanations for the differential trends in wage inequality in US/UK and Europe: that relative supply of skills increased faster in Europe, and that European labour market institutions prevented inequality from increasing. Although these explanations go some way...

The authors consider an economy where contracts are necessary to encourage investments. Contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes. The authors find that (1) it may be optimal to allow some corruption and not enforce property...