Currently governments worldwide are embarking on some of the largest fiscal expenditure programmes witnessed in peacetime history. The fiscal expenditure is considered necessary to support the economy and prevent a serious recession. Fiscal expenditure will be used to purchase equity in banks...

At the end of 2009, countries in the Eurozone began to experience a sudden divergence of bond yields as the perceived prospect of sovereign default risk increased. This paper examines the potential spillovers between the liquidity of the sovereign credit default swap (CDS) market and the...

The EMU accession countries are obliged to fulfill the Maastricht convergence criteria prior to entering the EMU. What should be the optimal monetary policy satisfying these criteria? To answer this question, the paper proposes a DSGE model of a two-sector small open economy. First, I derive the...

A unifying theme in the literature on organizations such as public bureaucracies and private non-profits is the importance of missions, as opposed to profit, as an organizational goal. Such mission-oriented organizations are frequently staffed by motivated agents who subscribe to the mission....

The paper discusses some fundamental problems in monetary economics associated with the determination and role of the numéraire. The issues are introduced by formalising a proposal, attributed to Eisler, to remove the zero lower bound on nominal interest rates by unbundling the numéraire and...

Within an asymmetric information set-up in which individuals di¤er in terms of their risk aversion and can choose whether or not to take preventative action, we illustrate in a uni…ed framework the equilibrium possibilities with stand-alone long-term care insurance and annuity contracts. With...

Performance related pay has been extended to practically the whole of the Civil Service over the last few years, and the Chancellor of the Exchequer recently announced the Government's intention to enlarge its role even further. Almost no serious work on seems to have been published on whether...

A reduction in income tax rates generates substantial dynamic responses within the framework of the standard neoclassical growth model. The short-run revenue loss after an income tax cut is partly - or, depending on parameter values, even completely - offset by growth in the long-run, due to the...

In the first of three related, and consecutive, papers we showed that forecasts for short-term policy interest rates in NZ and UK deteriorated over the first six months to a point when they became useless, after the first two quarters. Moreover they were expost biased, underestimating future...

We use equity index options to quantify the distribution of consumption growth disasters. The challenge lies in connecting the risk-neutral distribution of equity returns implied by options to the true distribution of consumption growth estimated from macroeconomic data. We attack the problem...