Author: Kang Yong TanPublisher:
ISBN:
Category : Economic forecasting
Languages : en
Pages : 572
Book Description
The objective of this thesis is to explore the implications of learning as an alternative expectations formation mechanism in international macroeconomics. The first part of the thesis (Chapters 2 to 4) deals with the effects of adaptive learning (Evans and Honkapohja, 2001) in the transmission of policy changes and shocks within and across borders. In particular, learning has been introduced to two major workhorse open economy models: the Mundell-Fleming Dornbusch and the McKibbin-Sachs Global (MSG3) models. The second part of the thesis (Chapters 5 to 6) begins by examining the learning behavior of international creditors about the credibility of an exchange rate regime using a game theoretic approach to reputation. Using the Pooled Mean Group methodology, this part also conducts an empirical analysis to investigate the inter-relationship between sovereign yield spreads and exchange rate regime during the pre-World War One era...