Phillips curves have often been estimated without due attention to the underlying time series properties of the data. In particular, the consequences of inflation having discrete breaks in mean, for example caused by supply shocks and the corresponding responses of policymakers, have not been...

A common finding in the empirical literature on the validity of purchasing power parity (PPP) is that it holds when tested for in panel data, but not in univariate (i.e. country specific) analysis. The usual explanation for this mismatch is that panel tests for unit roots and cointegration are...

We use a panel of 14 European countries to take a fresh look at the so-called Feldstein-Horioka puzzle on the high correlations between savings and investment observed within countries. A large literature has emerged to investigate this issue, using both individual country-by-country data and...