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Can Animal Spirits Solve The Forward Premium Puzzle?, Anthony Paul Shkrelja
Can Animal Spirits Solve The Forward Premium Puzzle?, Anthony Paul Shkrelja
Wayne State University Dissertations
This dissertation decomposes, discusses, and ventures to solve an international macroeconomic anomaly known as the "Forward Premium Puzzle" into three main chapters. Chapter 1 explores the state of research pertaining to the Forward Premium Puzzle, which derives from a failure in the Uncovered Interest Parity (UIP). The body of literature is split into three branches i. Those works advocating the presence of an anomaly due to assumption of Rational Expectations, ii. Works preserving the assumption of Rational Expectations and instead discuss a bias due to Risk Premia, and iii. Research focused on econometric implementation of the forward premium estimator. Furthermore, …
Essays In Fiscal Policy, Edmund Lawrence Matecki
Essays In Fiscal Policy, Edmund Lawrence Matecki
Wayne State University Dissertations
Fiscal policy is investigated in two settings. First, a fully identified neoclassical growth model with rich fiscal policy rules is augmented with non-Ricardian consumers and fit to post-war U.S. data using Bayesian techniques. Allowing transfer payments to directly affect the consumption choices of rule-of-thumb agents permits a new interpretation of time series evidence regarding which fiscal instruments have historically financed government debt. The economic impact of fiscal adjustments is studied for two labor supply specifications. The first specification restricts labor supply by equalizing hours worked across household types. The second relaxes this assumption, allowing for intratemporal optimization by non-Ricardian households. …