作者：ROWLANDS, D
摘要：The inability of governments to pre-commit to certain policies often results in Pareto-inefficient equilibria. A policy is not time-consistent if it requires a course of action that will subsequently become undesirable. This paper examines the possibility of creating constitutional rules which can support sovereign debt contracts which would otherwise violate the requirement of time-consistency. The possibility of establishing international reputation with internal enforcement mechanisms is se...
作者：WEST, KD; EDISON, HJ; CHO, D
作者单位：Federal Reserve System - USA; Texas A&M University System; Texas A&M University College Station
摘要：When estimates of variances are used to make asset allocation decisions, underestimates of population variances lead to lower expected utility than equivalent overestimates: a utility-based criterion is asymmetric, unlike standard criteria such as mean squared error. To illustrate how to estimate a utility-based criterion, we use five bilateral weekly dollar exchange rates, 1973-1989, and the corresponding pair of Eurodeposit rates. Of homoskedastic, GARCH, autoregressive and non-parametric mo...
作者：RASMUSSEN, BS
摘要：Optimal exchange rate regimes for small open economies with economy-wide wage setting and privately optimal wage indexation schemes are analysed. A fully discretionary. exchange rate regime (a managed float) offers flexibility while a credible fixed exchange rate regime offers price stability. Due to the time-inconsistency problem optimal wage indexation under a managed float may imply complete indexation of wages to prices. A managed float is shown to be unambiguously superior to a binding fi...
