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...

In a Monte Carlo experiment we show that using a small probability of Type I error may lead to reduced pretest estimator MSE when a Hausman pretest is used to choose between least squares and instrumental variables estimators.

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...

Following the financial crisis, many countries introduced fiscal stimulus packages making budget consolidations in the future rather challenging. Using a data set for 28 OECD countries spanning the period 1978–2007, we contribute to the literature on success probabilities of consolidation...

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....