Convertibility is an important factor in international trade where instruments valued in different currencies will be exchanged. Convertibility can be either total manner or a partial manner. However, whatever the type of convertibility, there will be advantages and disadvantages to  the economy of a country of which has  made a convertibility of its national currency. Convertibility was studie...

Phillips curves are central to discussions of inflation dynamics and monetary policy. New Keynesian Phillips curves describe how past inflation, expected future inflation, and a measure of real marginal cost or an output gap drive the current inflation rate. This paper studies the (potential) weak identification of these curves under generalized methods of moments (GMM) and traces this syndrome...

Previous models of rules versus discretion are extended to include uncertainty about the policymaker’s ‘type’. When people observe low inflation, they raise the possibility that the policymaker is committed to low inflation (type 1). This enhancement of reputation gives the uncommitted policymaker (type 2) an incentive to masquerade as the committed type. In the equilibrium the policymaker of t...

One of the stylized facts of Canadian labour markets in the 1990s and into the new millennium is a lengthening in labour contract duration. Various authors have analyzed the underlying factors influencing the duration of labour contracts in Canada, but they have typically covered only periods up to the late 1980s or early 1990s. A particular area of interest to the Bank of Canada is the role pl...

The U.S. economy in the 1980s saw a decline in the trend growth rate of monetary velocity, the ratio of nominal GNP to the money supply. This unexpected development was reflected in the systematic overprediction of inflation and nominal GNP growth by econometric models and economic forecasters. Robert Lucas (1976) showed that econometric models would err when simulating policy alternatives or w...

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Establishing the relationship between stock prices and macroeconomic variables is very important for formulating current economic stabilisation policies. This paper investigates the causal relationship between four macroeconomic variables and Dhaka Stock Exchange (DSE) stock prices using cointegration and Granger causality test. The results suggest that cointegration exists between stock prices...