Stein-rule estimators, also known as shrinkage estimators, combine sample and non-sample information in a way that improves the precision of the estimation process or the quality of subsequent predictions. A Stein-rule estimator is a weighted average of a restricted and an unrestricted...

The Hausman test is used in applied economic work as a test of misspecification. It is most commonly thought of as a test of whether one or more explanatory variables in a regression model are endogenous. The usual Hausman contrast test requires one estimator to be efficient under the null...

The target zone model by Krugman (1991) assumes that foreign exchange intervention targets exchange rate levels. We argue that the fit of this model depends on the stage of development of capital markets. Foreign exchange intervention of countries with highly developed capital markets is in line...

The target zone model by Krugman (1991) assumes that foreign exchange intervention targets exchange rate levels. We argue that the fit of this model depends on the stage of development of capital markets. Foreign exchange intervention of countries with highly developed capital markets is in line...

In this paper, we examine the importance of regions in the behavior of city level relative prices in the United States. The results indicate that average relative price variability is significantly lower if the city pairs associated with a relative price series belong to the same region....

Using annual consumer price index (CPI) data for 17 U.S. cities between 1918 and 2007, this paper examines the implications of the choice of numeraire city for the behavior of relative prices across cities. A common factor representation of relative price is used to understand the nature of the...