In this book, Andrew Harvey sets out to provide a unified and comprehensive theory of structural time series models. Unlike the traditional ARIMA models, structural time series models consist explicitly of unobserved components, such as trends and seasonals, which have a direct interpretation. As a result the model selection methodology associated with structural models is much closer to econometric methodology. The link with econometrics is made even closer by the natural way in which the models can be extended to include explanatory variables and to cope with multivariate time series. From the technical point of view, state space models and the Kalman filter play a key role in the statistical treatment of structural time series models. The book includes a detailed treatment of the Kalman filter. This technique was originally developed in control engineering, but is becoming increasingly important in fields such as economics and operations research. This book is concerned primarily with modelling economic and social time series, and with addressing the special problems which the treatment of such series poses. The properties of the models and the methodological techniques used to select them are illustrated with various applications. These range from the modellling of trends and cycles in US macroeconomic time series to to an evaluation of the effects of seat belt legislation in the UK.

Forecasting, Structural Time Series Models and the Kalman Filter

The multinomial logit model is perhaps the most commonly used regression model for nominal outcomes in the social sciences. A concern raised by many researchers, however, is the assumption of the independence of irrelevant alternatives (IIA) that is implicit in the model. In this article, the authors undertake a series of Monte Carlo simulations to evaluate the three most commonly discussed tests of IIA. Results suggest that the size properties of the most common IIA tests depend on the data structure for the independent variables. These findings are consistent with an earlier impression that, even in well-specified models, IIA tests often reject the assumption when the alternatives seem distinct and often fail to reject IIA when the alternatives can reasonably be viewed as close substitutes. The authors conclude that tests of the IIA assumption that are based on the estimation of a restricted choice set are unsatisfactory for applied work.

Testing for IIA in the Multinomial Logit Model

Global climate change is a change in the long-term weather patterns that characterize the regions of the world. Scientists state unequivocally that the earth is warming. Natural climate variability alone cannot explain this trend. Human activities, especially the burning of coal and oil, have warmed the earth by dramatically increasing the concentrations of heat-trapping gases in the atmosphere. The more of these gases humans put into the atmosphere, the more the earth will warm in the decades and centuries ahead. The impacts of warming can already be observed in many places, from rising sea levels to melting snow and ice to changing weather patterns. Climate change is already affecting ecosystems, freshwater supplies, and human health. Although climate change cannot be avoided entirely, the most severe impacts of climate change can be avoided by substantially reducing the amount of heat-trapping gases released into the atmosphere. However, the time available for beginning serious action to avoid severe global consequences is growing short. This paper reviews assessing of such climate change impacts on various components of the ecosystem such as air, water, plants, animals and human beings, with special emphasis on economy. The most daunting problem of global warming is also discussed. This paper, further reviews the mitigation measures, with a special focus on carbon sequestration and clean development mechanism (CDM). The importance of synergy between climate change mitigation and adaptation has been discussed. An overview of the relationship between economy and emissions, including Carbon Tax and Emission Trading and the policies are also presented.

A review of climate change, mitigation and adaptation

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Thirty Years of Current Account Imbalances, Current Account Reversals, and Sudden Stops

It has been customary to specify the objectives of macro-economic policy in terms of targets with such labels as "non-inflationary full employment" (despite the doubts raised by the Phillips Curve as to whether such a thing exists), "rapid growth" (which is hardly instructive) and "balance-of-payments equilibrium" (whatever that may mean). This procedure is inadequate where the targets are lacking in immediate normative significance. The balance of payments, for example, is a means to an end and in no sense an end in itself; and it is the task of economists to analyse means and not, as the conventional procedure does, to accept them as data. Professor Phelps' recent article2 performs the valuable function of demonstrating that, in the field of macroeconomic policy as much as in the context of optimal capital accumulation, it is fruitful to derive immediate policy goals by maximizing a welfare function specified in terms of the ultimate ends of economic activity. The purpose of the present Note is to clarify the generality of Phelps' conclusion that proper consideration of inter-temporal interdependence results in a reduction of the utilization ratio that can be considered optimal. It will be suggested that both the form of the utility function and the model of the inflationary process that are employed to derive this conclusion are questionable. More traditional specifications lead to the traditional conclusion that was criticized by Phelps, even when the problem is considered in an inter-temporal context. If the essential elements of Phelps' model are granted, however, it is possible to include one significant generalization without difficulty. Even here, however, the "deflationary moral" of Phelps' model is critically dependent upon the particular form of his utility function; a more symmetrical view of the welfare loss caused by changing prices destroys the conclusion that adaptive expectations must lead to a reduction in the optimum utilization ratio. Phelps' model may be summarized as follows. It is assumed that the rate of inflation (f/p) can be broken down into two additive components, the part that is expected (z = x of Phelps' article) and the part that is unexpected (v). Unexpected inflation is determined by the

Phillips Curves, Expectations of Inflation and Optimal Unemployment over Time: Comment

Do broad money, output, and prices stand for a stable relationship in India?

http://www.igidr.ac.in/conf/money/mfc_08/Asymmetric%20Exchange%20rate...%20M.%20Ramchandran%20&%20Naveen%20S.pdf

Asymmetric exchange rate intervention and international reserve accumulation in India

The focus of this study is to identify the determinants of share prices in the Indian market. The study uses panel data pertaining to three sectors viz., auto, healthcare and public sector undertakings over the period 2000-2009 and employs the fully modified ordinary least squares method. The results indicate that the variables dividend, price-earnings ratio and leverage are significant determinants of share prices for all the sectors under consideration. Further, profitability is found to influence share prices only in the case of auto sector.

Determinants of share prices in India

The optimal level of international reserves: evidence for India

Reduced-form estimates of the Reserve Bank of India's (RBI) first-order condition indicate that its preferences have been asymmetric with respect to exchange-rate management, with the response to the rate of rupee appreciation being relatively larger than to the rate of rupee depreciation of the same magnitude. This behaviour is shown to account for a sizable fraction of reserve accretion in recent years.

M. Ramachandran

Papers

Do broad money, output, and prices stand for a stable relationship in India?

Asymmetric exchange rate intervention and international reserve accumulation in India

Determinants of share prices in India

The optimal level of international reserves: evidence for India

Preference asymmetry and international reserve accretion in India