We estimate a behavioral New Keynesian (NK) model in which households and firms plan over finite horizon. The finite-horizon planning (FHP) outperforms rational expectations versions of the NK as well other models. In FHP model, are forward-looking thinking about events their horizon but backward-looking regarding beyond that point. This gives rise to substantial aggregate persistence without r...

This paper investigates the e¤ects of replacing the consumer price index (CPI) with the wholesale price index (WPI) in the cointegrating international parity relationships found by Juselius and MacDonald (2000). Our empirical analysis outstandingly produced results similar to the ones obtained by Juselius and MacDonald, suggesting that the cointegration relationships in the international parity...

The data in Fehr and Tyran (2001) and Petersen and Winn (2014) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money illusion affects subjects’ expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus Petersen and Winn (2014) provide a misleading i...

– This paper applies neural network methodology to inßation forecasting in the Euro-area and the USA. Neural network methodology outperforms linear forecasting methods for the Euro Area at forecast horizons of one, three, and six month horizons, while the linear model is preferable for US data. The nonlinear estimation shows that unemployment is a signiÞcant predictor of inßation for the Euro A...

We determine the second best rule for the inflation tax in monetary general equilibrium models where money is dominated in rate of return. The results in the literature are ambiguous and inconsistent across different monetary environments. We derive and compare the optimal inflation tax solutions across the different environments and find that Friedman's policy recommendation of a zero nominal ...

In this paper we apply the wavelets methodology to the analysis of the comovements of for some MENA countries from June 1997 until March 2005. We decompose weekly stock market returns into di¤erent time scale components using the non-decimated discrete wavelet transform and then analyze the relationships among these variables at the di¤erent time scales. Keywords : Stock market returns, Wavelet...

VI. Iversen LH, Nørgaard M, Jacobsen J, Laurberg S, Sørensen HT. The impact of comorbidity on survival of Danish colorectal cancer patients from 1995 to 2006 – a population-based cohort study. Diseases of the Colon & Rectum, 2009, 52: 71-78. VII. Iversen LH, Nielsen H, Pedersen L, Harling H, Laurberg S. Seasonal variation in short-term mortality after surgery for colorectal cancer? Colorectal D...

We re-examine the empirical relevance of the cost channel of monetary policy (e.g. Ravenna andWalsh, 2006), employing recently developed moment-conditions inference methods, including identi…cation-robust procedures. Using US data, our results suggest that the cost channel e¤ect is poorly identi…ed and we are thus unable to corroborate the previous results in the literature. Keywords: Cost chan...

We study forward-looking economic models assuming that agents take one step ahead expectations looking back k time periods. We show that the dynamics of the economy with such an expectation function are characterized by the coexistence of perfect foresight and nonperfect foresight cycles. The stability of all these periodic solutions under bounded rationality is related to the stability of the ...

We examine robustness of stability under learning to observability of exogenous shocks. Regardless of observability assumptions, the minimal state variable solution is robustly stable under learning provided the expectational feedback is not both positive and large, while the nonfundamental solution is never robustly stable. Overlapping generations and New Keynesian models are considered and co...