On the Determinacy of Monetary Policy under Exceptional Errors (2007)
Chadha, Jagjit, Corrado, Luisa
Forward looking agents with expectational errors provide a problem for monetary policy. We show that under such conditions a standard interest rate rule may not achieve determinacy. We suggest a...
No Man is an Island: the Inter-personal Determinants of Regional Well-Being in Europe (2007)
There is a strong need to complement the analysis of social well-being at the European regional level to supplement existing, predominantly economic analysis. This work extends the measurement of...
Corrado, Luisa, Miller, Marcus, Zhang, Lei
In this paper we show how trading rules can generate excess volatility in the exchange rate through repeated entry and exit of currency bears and bulls. This is something of a caricature: but it...
Bulls, Bears and Excess Volatility: can currency intervention help? (2007)
Corrado, Luisa, Miller, Marcus, Zhang, Lei
Asset mis-pricing may reflect investor psychology, with excess volatility arising from switches of sentiment. For a floating exchange rate where fundamentals follow a random walk, we show that excess...
Identifying and Interpreting Convergence Clusters Across Europe (2004)
Corrado, Luisa, Martin, Ron, Weeks, Melvyn
In this paper we examine the spatial and temporal distribution of per capita income across Europe. We base our analysis on a cluster methodology which allows for an endogenous selection of regional...
"The Welfare States in a United Europe" (2003)
Corrado, Luisa, Londoño, David, Mennini, Francesco, Trovato, Giovanni
Despite the creation in Europe of a common economic and monetary union, the convergence towards a unique European Welfare State (EWS) model is not yet in evidence. By applying a ß-Convergence panel...
Exchange monitoring bands: theory and policy (2003)
Corrado, Luisa, Miller, Marcus H., Zhang, Lei
Recent empirical research by Mark Taylor and co-authors has found evidence of hybrid dynamics for the real exchange rate. While there is a random walk near equilibrium, for real exchange rates some...
Exchange Rate Monitoring Bands: Theory and Policy (2002)
Corrado, Luisa, Miller, Marcus, Zhang, Lei
Recent empirical research by Mark Taylor and coauthors has found evidence of hybrid dynamics for real exchange rates. While there is a random walk near equilibrium, for real exchange rates some...
Exchange rate monitoring bands: theory and policy (2002)
Recent empirical research by Mark Taylor and co-authors has found evidence of hybrid dynamics for real exchange rates. While there is a random walk near equilibrium, for real exchange rates some...
Corrado , Luisa, Holly , Sean, Turner , Paul
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Corrado , Luisa, Holly , Sean, Turner , Paul
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Corrado , Luisa, Holly , Sean, Turner , Paul
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Corrado , Luisa, Holly , Sean, Turner , Paul
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Habit Formation and Interest Rate Smoothing
Following a conjecture of Kozicki and Tinsley (2002) we generalise the habit formation model of consumption to allow for both a multiplicative utility function and a habit-aspiration function which...
On the Determinacy of Monetary Policy under Expectational Errors
Jagjit S. Chadha, Luisa Corrado
Forward looking agents with expectational errors provide a problem for monetary policy. We show that under such conditions a standard interest rate rule may not achieve determinacy. We suggest a...
Exchange Monitoring Bands: Theory and Policy
Luisa Corrado, Marcus H. Miller, Lei Zhang
Recent empirical research by Mark Taylor and co-authors has found evidence of hybrid dynamics for the real exchange rate. While there is a random walk near equilibrium, for real exchange rates some...
Nonlinear Phillips Curves, Mixing Feedback Rules and the Distribution of Inflation and Output
Optimal nominal interest rate rules are usually set assuming that the underlying world is linear. In this paper we consider the performance of optimal rules when the underlying relationship between...
Identifying and Interpreting Regional Convergence Clusters across Europe
Luisa Corrado, Ron Martin, Melvyn Weeks
In this paper we test for regional convergence clusters across the EU. We utilise a methodology that allows for the endogenous selection of regional clusters using a multivariate test for...
Exchange Rate Monitoring Bands: Theory and Policy
Luisa Corrado, Marcus Miller, Lei Zhang
Recent empirical research by Mark Taylor and coauthors has found evidence of hybrid dynamics for the real exchange rate. While there is a random walk near equilibrium, for real exchange rates some...
Bulls, bears and excess volatility: can currency intervention help?
Luisa Corrado, Marcus Miller, Lei Zhang
Asset mis-pricing may reflect investor psychology; and excess volatility can arise from switches of sentiment. For a floating exchange rate where fundamentals follow a random walk, we show that...
Monitoring Bands and Monitoring Rules: how currency intervention can change market composition
Luisa Corrado, Marcus Miller, Lei Zhang
In this paper we show how trading rules can generate excess volatility in the exchange rate through repeated entry and exit of currency "bears" and "bulls". This is something of a caricature: but it...
Habit formation and Interest-Rate Smoothing
Following a conjecture of Kozicki and Tinsley we generalises the habit formation model of consumption to allow for both a multiplicative utility function and a habit\aspiration function which is a...
Linear Feedback Rules in Non-Linear Models with Rational Expectations
Sean Holly, Paul Turner, Luisa Corrado
The adoption of inflation targets by a number of industrialised countries in the last decade has reawakened interest in the study of rules to characterise monetary policy. In the literature a clear...
Volatility and Policy Regimes: the UK joining the Euro
Volatility, Euro, Monetary Policy
The resolution of the international debt crises has stimulated extensive research on how to design solutions for countries facing external debt overhang problems. This paper analyses the benefits for...
Exchange Rate Monitoring Bands: Theory and Policy
Corrado, Luisa, Miller, Marcus, Zhang, Lei
Recent empirical research by Mark Taylor and co-authors has found evidence of hybrid dynamics for real exchange rates. While there is a random walk near equilibrium, for real exchange rates some...
Exchange rate monitoring bands: theory and practice
Corrado, Luisa, Marcus Miller, Lei Zhang
Recent empirical research has found evidence of hybrid dynamics for the real exchange rate. While there is a random walk near equilibrium, for real exchange rates some distance from equilibrium there...
persistent excitation, non-linear models, rational expectation, optimal control,
Luisa Corrado, Sean Holly, Paul Turner
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Domino Effects in a Multilateral Peg Model of Currency Crisis with State-Contingent Reserve Dynamics
This work analyses the domino effects of the Exchange Rate Mechanism (ERM) crisis stemming from linkages in competitiveness already outlined in Gerlach and Smets (1995); an additional assumption that...
Long-Term Growth and Short-Term Volatility: The Labour Market Nexus
Barbara Annicchiarico, Luisa Corrado, Alessandra Pelloni
We study the relationship between growth and variability in a DSGE model with nominal rigidities and growth driven by learning-by-doing. We show that this relationship may be positive or negative...
Leonardo Becchetti, Luisa Corrado, Fiammetta Rossetti
We investigate the relationship between money and happiness across the waves of the British Household Panel Study by using a latent class approach which accounts for slope heterogeneity, omitted...
A monetary economy subject to expectational sunspots is prone to instability, in the sense of multiple rational expectations equilibria. We show how to modify the policy rule to guarantee stability...
Reconnecting Money to Inflation: The Role of the External Finance Premium
Jagjit S. Chadha, Luisa Corrado, Sean Holly
We re-connect money to inflation using Goodfriend and McCallum’s (2007) model where banks supply loans to cash-in-advance constrained consumers on the basis of the value of collateral provided and...
Reconnecting Money to Inflation: The Role of the External Finance Premium
Jagjit S. Chadha, Luisa Corrado, Qi Sun
In the canonical monetary policy model, money is endogenous to the optimal path for interest rates, output. But when liquidity provision by banks dominates the demand for transactions money from the...
The Welfare States in a United Europe
Luisa Corrado, Francesco S. Mennini, Giovanni Trovato
Despite the creation in Europe of a common economic and monetary union, the convergence towards a unique European Welfare State (EWS) model is not yet in evidence. By applying a §-Convergence panel...
Volatility, Growth and Labour Elasticity
Barbara Annicchiarico, Luisa Corrado, Alessandra Pelloni
We study the relationship between growth and variability in a DSGE model with nominal rigidities and growth driven by learning-by-doing. We show that this relationship may be positive or negative...
Luisa Corrado, Sean Holly, Paul Turner
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...
Luisa Corrado, Sean Holly, Paul Turner
The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to...