The captioned article was earlier published in “Economic Horizons” volume 18, #72 – AH 1418 – 1997 (4) Pages (65-78). I had some concerns about the article regarding the methodology adopted for analysis in deriving the macroeconomic parameters and the derivation and interpretation of...

A so-called “asset market meltdown hypothesis” predicts that baby boomers’ large savings will drive asset market booms that will eventually collapse because of the boomers’ large retirement dissavings. As good news to baby boomers, our analysis shows that this meltdown hypothesis is...

El documento analiza la evolución del costo de uso del capital en el periodo 1997 –2003 en Colombia. A diferencia de los trabajos anteriores se construye una serie del costo de uso del capital a partir de la información suministrada por las empresas a la Superintendencia de Sociedades, lo...

This paper documents that region-level consumption exhibits excess sensitivity to lagged income in Italy, Japan, Spain, the United Kingdom and West Germany. However, region-specific idiosyncratic) consumption exhibits substantially less sensitivity to lagged region-specific income. Also, excess...

This paper explores whether habit formation in the representative agent’s preferences can explain two failures of the standard permanent income model: the sensitivity to lagged consumer sentiment, and to predictable changes in income. I show that in a habit formation model, the sensitivity of...

This paper gauges the causal relationship between external and budget deficits by using Blanchard's overlapping generations model. This model sests the twin deficits hypothesis (i.e. there is a positive relationship between the deficits) and the Ricardian equivalence hypothesis (i.e. there is no...

This paper examines the effects of private financial (non-FDI) capital inflows in Thailand in the pre-crisis period (1980:I–96:IV). Private capital inflows are found to be associated with higher asset prices, lower lending rates, surges in bank lending and domestic spending driven by higher...

The most salient feature of financial dollarization, and the one that causes more concern to policymakers, is its persistence: even after successful macroeconomic stabilizations, dollarization ratios often remain high. In this paper we claim that this persistence is connected to the fact that...

This paper addresses the question if there are differences between time patterns in the volatility of investment across different industrial sectors. A competitive partial-equilibrium model with quadratic adjustment costs in investment and a GARCH demand shock is developed to predict aggregate...

This paper analyzes the interaction of financial frictions and non- convex adjustment costs. With non-convex adjustment costs firms infrequently carry out discrete investment projects. Therefore, financial variables may influence investment in two ways. Theoretically, they can alter the...