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Long-run Equilibrium (long-run + equilibrium)
Terms modified by Long-run Equilibrium Selected AbstractsOther financial corporations: Cinderella or ugly sister of empirical monetary economics?INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 1 2005K. Alec Chrystal Abstract This paper reports estimates of an econometric model of the determinants of OFCs' broad money holding and M4 lending to OFCs. This is of interest both as providing information about a component of UK money and credit aggregates and because it provides some evidence of the link between financial activity and growth of the real economy. We model the long-run equilibria for money holding and lending to this sector as being driven by GDP, wealth, the return to financial services and various interest spreads. The dynamics of OFCs' money and lending are shown to be interdependent. We then consider the evidence for interactions between OFCs and other sectors. Our results indicate that M4 lending to OFCs is significantly related to aggregate investment in the long run, but is largely unrelated to the spending of households. Copyright © 2005 John Wiley & Sons, Ltd. [source] INTERREGIONAL KNOWLEDGE SPILLOVERS AND OCCUPATIONAL CHOICE IN A MODEL OF FREE TRADE AND ENDOGENOUS GROWTH,JOURNAL OF REGIONAL SCIENCE, Issue 5 2009Colin R. Davis ABSTRACT A two region model of horizontal innovation with free trade and occupational choice is used to examine the spatial patterns of innovation and manufacturing industry in interior and core-periphery long-run equilibria. The inclusion of skill heterogeneity among workers creates a tension between stabilizing productivity effects that coincide with reallocations of workers across industries, and destabilizing productivity effects that arise with localized stocks of knowledge capital. We find that while core-periphery equilibria are always saddlepath stable, interior equilibria are saddlepath stable when knowledge spillovers exceed a threshold level but are unstable otherwise. In addition, incorporating skill heterogeneity into the model allows for interior equilibria with asymmetric shares for innovation and industry. [source] IMPLICATIONS OF ALTERNATIVE EMISSION TRADING PLANS: EXPERIMENTAL EVIDENCEPACIFIC ECONOMIC REVIEW, Issue 2 2006Neil J. Buckley Theory suggests the long-run equilibria of the plans will differ with baselines proportional to output. To test this prediction we develop a computerized environment in which subjects representing firms can adjust their emission rates and capacity levels and trade emission rights in a sealed-bid auction. Demand for output is simulated. We report on six laboratory sessions with variable emissions rates, but fixed capacity: three each with the cap-and-trade and baseline-and-credit mechanisms. [source] Non-linear interest rate dynamics and forecasting: evidence for US and Australian interest ratesINTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 2 2009David G. McMillan Abstract Recent empirical finance research has suggested the potential for interest rate series to exhibit non-linear adjustment to equilibrium. This paper examines a variety of models designed to capture these effects and compares both their in-sample and out-of-sample performance with a linear alternative. Using short- and long-term interest rates we report evidence that a logistic smooth-transition error-correction model is able to best characterize the data and provide superior out-of-sample forecasts, especially for the short rate, over both linear and non-linear alternatives. This model suggests that market dynamics differ depending on whether the deviations from long-run equilibrium are above or below the threshold value. Copyright © 2007 John Wiley & Sons, Ltd. [source] Chartism and exchange rate volatility,INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 3 2007Mikael Bask Abstract The purpose of this paper is to implement theoretically, the observation that the relative importance of fundamental versus technical analysis in the foreign exchange market depends on the time horizon in currency trade. For shorter time horizons, more weight is placed on technical analysis, while more weight is placed on fundamental analysis for longer horizons. The theoretical framework is the Dornbusch overshooting model, where moving averages is the technical trading technique used by the chartists. The perfect foresight path near long-run equilibrium is derived, and it is shown that the magnitude of exchange rate overshooting is larger than in the Dornbusch model. Specifically, the extent of overshooting depends inversely on the time horizon in currency trade. How changes in the model's structural parameters endogenously affect this time horizon and the magnitude of overshooting along the perfect foresight path are also derived. Copyright © 2007 John Wiley & Sons, Ltd. [source] "Spontaneous" Interethnic Order: The Emergence of Collective, Path-Dependent CooperationINTERNATIONAL STUDIES QUARTERLY, Issue 4 2000Badredine Arfi Can "spontaneous," decentralized interethnic cooperation emerge among ethnic groups whose members heavily discount future interethnic relations and do not fear punishment for interethnic noncooperation? Why is it that once the interaction between two ethnic groups evolves along a certain (cooperative or conflictual) path it sometimes becomes harder for the interacting groups to reverse course and seek alternative paths? The answer to these two questions lies in the fact that individual members not only are always calculative and could hence act opportunistically, but also are interdependent and can learn from one another. Because the members of interacting groups operate interdependently they thereby create collective nonlinear path dependence. Using a social game (within evolutionary game theory) the article shows counterintuitively that the emergence of collective, nonlinear path dependence within and across ethnic groups whose members heavily discount the future and face no punishment for interethnic noncooperation makes "spontaneous" decentralized interethnic cooperation a long-run equilibrium. Collective cooperation can thus develop path-dependently among ethnic groups without a Damocles' sword of any sort hanging over their members' heads, even when most individuals are shortsighted and opportunistic. [source] Analysis of the demand for imported meat in Switzerland using a dynamic specification: Implications for the European UnionAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 4 2007Shiferaw T. Feleke The study identifies the long-run equilibrium (steady-state) relationship of the demand for imported meat in Switzerland and the speed of adjustment of the short-run demand using the Error Correction Linear Approximate Almost Ideal Demand System (EC-LA/AIDS). Results indicate that imports of meat into Switzerland have a long-run equilibrium relationship with price and real expenditure. The study also finds that the demand for pork is price elastic, while the demand for beef, chicken, and mutton is price inelastic. Results will have important implications for the EU meat industry to adjust its export supply in response to changes in prices resulting from the bilateral trade agreements in which Switzerland is expected to reduce or abolish nontariff barriers, further open its market, and reduce or abolish all duties and export subsidies. [EconLit citations: Q110, Q130, Q170 © 2007 Wiley Periodicals, Inc. Agribusiness 23: 497,510, 2007. [source] Forecast performance of nonlinear error-correction models with multiple regimesJOURNAL OF FORECASTING, Issue 2 2005Zacharias Psaradakis Abstract In this paper we investigate the forecast performance of nonlinear error-correction models with regime switching. In particular, we focus on threshold and Markov switching error-correction models, where adjustment towards long-run equilibrium is nonlinear and discontinuous. Our simulation study reveals that the gains from using a correctly specified nonlinear model can be considerable, especially if disequilibrium adjustment is strong and/or the magnitude of parameter changes is relatively large. Copyright © 2005 John Wiley & Sons, Ltd. [source] Cointegration Theory, Equilibrium and Disequilibrium EconomicsTHE MANCHESTER SCHOOL, Issue 1 2004Karim Maher Abadir Two variables are said to be cointegrated when they move closely together over time, after proper scaling. Cointegration was taken to be the statistical expression of the notion of equilibrium in economics. But is it still possible to talk of cointegration when ,disequilibrium' economics prevail? We argue that it is, and that the duality is strongest between cointegration theory and economic theories of non-clearing markets. By setting up a simple generic non-parametric model, it is shown that Clower's dual decision hypothesis is a more direct and natural expression of the notion of cointegration than long-run equilibrium is. With sticky prices, quantities (e.g. consumption and income) move together more closely than they would otherwise. As a by-product, the model gives rise to (and justifies from an economics standpoint) a recent statistical approach to modelling economic time series. An observational equivalence between two econometric models is also presented. [source] Non-explanatory equilibria: An extremely simple game with (mostly) unattainable fixed pointsCOMPLEXITY, Issue 4 2002Joshua M. Epstein Abstract Equilibrium analysis pervades mathematical social science. This paper calls into question the explanatory significance of equilibrium by offering an extremely simple game, most of whose equilibria are unattainable in principle from any of its initial conditions. Moreover, the number of computation steps required to reach those (few) equilibria that are attainable is shown to grow exponentially with the number of players,making long-run equilibrium a poor predictor of the game's observed state. The paper also poses a number of combinatorially challenging problems raised by the game. © 2002 Wiley Periodicals, Inc. [source] | |||||||||||||