Japan has experienced a prolonged stagnation since bursting the asset market bubble early in the 1990's. It is very important to understand the underlying problems in order to find a remedy to escape this stagnation. This thesis aims to theoretically analyse the current Japanese economy, especially from the viewpoint of multiple equilibria. According to this view, the same fundamentals can yield a multiple outcome depending on history or expectations. This thesis argues that Japan's situation can be regarded as a bad equilibrium which has been provoked by wide-spread pessimism and a bubble collapse. Three chapters independently attempt to construct theoretical models describing the current Japanese situation. Chapter 2 demonstrates that demand externalities yield multiple equilibria. In a bad equilibrium, firms dare not participate in trade, which causes aggregate demand and welfare to decrease. A global games approach then illustrates how equilibrium is selected. Chapter 3, with the objective of seeing if Japan's depression was provoked by the misconduct of monetary policy, investigates the relation between indeterminacy and a monetary policy rule using a sticky price and firm-specific investment model. The standard Taylor principle is shown to be almost sufficient to eliminate indeterminacy, which suggests that the Bank of Japan did not exacerbate the economy while interest rate rules functioned, that is, until 1999. Chapter 4 focuses on a zero nominal interest rate bound, which has been observed since 1999. The ineffectiveness of the monetary policy yields a bad short-run outcome where real economic activity and asset prices become lower. There are long-run multiple equilibria in this story, and that is our explanation for the problem. Within this model, however, our .analysis does not justify a claim that a zero bound for the interest rate causes a long-run equilibrium to be a bad one.

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This thesis develops empirical econometric models of the private sector aggregate demand for real and financial assets in Kenya over the period 1973 to 1990. Single-equation error-correction models of the demand for money are estimated using systems cointegration methods developed by Johansen (1988). The models are found to be statistically stable functions throughout the period, and are capable of encompassing existing studies. Across a range of monetary aggregates, including a Divisia index aggregate for broad money, the models describe demand for money functions in which inflation and illegal foreign currency substitution are significant determinants of money holdings, and where the private sector adjusts rapidly to deviations from its stable longrun equilibrium real money demand. The demand for money is then integrated within a neo-classical model of asset demands, which examines the behaviour of the aggregate private sector asset portfolio in response to changes in relative prices between assets and to external shocks to the economy, principally the 1976-77 coffee boom. A variant of the Almost Ideal Demand System model developed by Deaton and Muellbauer (1980) is estimated for a class of six assets: base money, banking system deposits, government securities, tradable capital, nontradable capital and inventories. The asset substitution model, which also takes an errorcorrection form, and which allows for credit rationing, generates results which are consistent with the earlier demand for money models, where private agents are also denied access to foreign-denominated assets. Using this model, the maintenance of policies of financial repression are shown to cause the private sector to offset inflationary shocks through the accumulation of real assets, principally in the form of non-tradable capital in the construction and property sectors. The evidence from the two models is used to analyze the fiscal effects of the inflation tax and financial repression measures. Policies of financial liberalization are shown to reduce the revenue maximizing rate of inflation (estimated to be 14% per annum) and the implicit tax on domestic holders of government liabilities. This dampens asset substitution in response to inflationary shocks and offsets the adverse effects of "construction-boom" investment on non-tradable capital prices.

Diss. (sammanfattning). Umeå : Sveriges lantbruksuniv. / Härtill 5 uppsatser.

The focus of this thesis is on the application of decision models to the economic evaluation of health care technologies. The primary objective addresses the correct choice of modelling technique, as the attributes of the chosen technique could have a significant impact on the process, as well as the results, of an evaluation. Separate decision models, a Markov process and a discrete event simulation (DES) model are applied to a case study evaluation comparing alternative adjuvant therapies for early breast cancer. The case study models are built and analysed as stochastic models: whereby probability distributions are specified to represent the uncertainty about the true values of the model input parameters. Three secondary objectives are also specified. Firstly, the empirical application of the alternative decision models requires the specification of a 'modelling process' that is not well defined in the health economics literature. Secondly, a comparison of alternative methods for specifying probability distributions to describe the uncertainty in the model's input parameters is undertaken. The final secondary objective covers the application of methods for valuing the collection of additional information to inform the resource allocation decision. The empirical application of the two relevant modelling techniques clarifies the potential advantages derived from the increased flexibility provided by DES over Markov models. The thesis concludes that the use of DES should be strongly considered if either of the following issues appear relevant: model parameters are a function of the time spent in particular states, or the data describing the timing of events are not in the form of transition probabilities. The full description of the modelling process provides a resource for health economists wanting to use decision models. No definitive process is established, however, as there exist competing methods for various stages of the modelling process. The main conclusion from the comparison of methods for specifying probability distributions around the input parameters is that the theoretically specified distributions are most likely to provide a common baseline for comparisons between evaluations. The central question that remains to be addressed is which method is the most theoretically correct? The application of a Vol analysis provides useful insights into the methods employed and leads to the identification of particular methodological issues requiring future research in this area.

Diss. Linköping : Univ.

Diss. (sammanfattning) Stockholm : Karolinska institutet, 2006. / Härtill 5 uppsatser.

Modern banking theories provide a host of explanations for the existence of intermediaries, highlight their important influence on economic growth, delineate the risks inherent in the services they provide, and illustrate the market failures and real costs of bank failures that precipitate the need for regulation and oversight of the sector. This thesis is a collection of three essays that looks at three of these key aspects of financial intermediaries - the development of financial intermediaries, the function of the lender of last resort that has emerged as an important part of the safety net afforded to financial intermediaries, and the occurrence of financial crises. The first chapter of this thesis provides an introduction to the academic literature on financial intermediation covering different theories put forward to explain their emergence, and highlighting the risks inherent in their operation. It emphasizes the crucial functions they perform in the economy and makes a case for regulation and oversight of the sector to reduce the incidence and alleviate the effects of financial crises. The second chapter seeks to determine the policy and institutional factors that influence the development of financial institutions as measured across three dimensions - depth, efficiency, and stability. Applying the concept of the financial possibility frontier, developed by Beck and Feyen (2013) and formalized by Barajas et al. (2013b), we determine key policy variables affecting the gap between actual levels of development and benchmarks predicted by structural variables. Our dynamic panel estimation shows that inflation, trade openness, institutional quality, and banking crises significantly affect financial development. We also assess the impact of the policy variables across the different dimensions of development thereby identifying complementarities and potential trade-offs for policy makers. The third chapter models the role of the lender of last resort (LoLR) in a general equilibrium framework. We allow for heterogeneous agents and a risk-averse banking sector, and incorporate the frictions of endogenous default, liquidity, and money. Adverse supply shocks in monetary endowments trigger default, leading to deterioration in the value of bank assets, and subsequent bank illiquidity in some states of the world. LoLR intervention is then assessed with regards to its economy-wide effect on welfare, bank profitability, and the level of default. The results provide a justification for constructive ambiguity. The fourth chapter aims to provide an explanation for the incidence of financial crises by combining insights from agency theory and Minsky's financial instability hypothesis (Minsky, 1992) in a model with endogenous default. Our theoretical model shows that the probability of a financial crisis increases as the quality of shareholder information decreases. We then develop a measure for the quality of shareholder information following Simon (1989) and show that the market-wide quality of shareholder information: i) is poor (with no trend) in the Pre-SEC period (1840 to 1934); ii) improves substantially following the SEC reforms; and iii) gradually declines starting in the 1960s/70s until it is now back to pre-SEC levels. This matches up with the standard list of US financial crises (as in Reinhart and Rogoff 2009; Reinhart 2010) and supports our hypothesis that the likelihood of a financial crisis increases with deterioration in the quality of shareholder information.

This dissertation consists of two essays. The first essay focuses on developing a quantitative theory for a small open economy dynamic stochastic general equilibrium (DSGE) model with a housing sector allowing for both contemporaneous and news shocks. The second essay is an empirical study on the macroeconomic forecasting using both structural and non-structural models. In the first essay, we develop a DSGE model with a housing sector, which incorporates both contemporaneous and news shocks to domestic and external fundamentals, to explore the kind of and the extent to which different shocks to economic fundamentals matter for driving housing market dynamics in a small open economy. The model is estimated by the Bayesian method, using data from Hong Kong. The quantitative results show that external shocks and news shocks play a significant role in this market. Contemporaneous shock to foreign housing preference, contemporaneous shock to terms of trade, and news shocks to technology in the consumption goods sector explain one-third each of the variance of housing price. Terms of trade contemporaneous shock and consumption technology news shocks also contribute 36% and 59%, respectively, to the variance in housing investment. The simulation results enable policy makers to identify the key driving forces behind the housing market dynamics and the interaction between housing market and the macroeconomy in Hong Kong. In the second essay, we compare the forecasting performance between structural and non-structural models for a small open economy. The structural model refers to the small open economy DSGE model with the housing sector in the first essay. In addition, we examine various non-structural models including both Bayesian and classical time-series methods in our forecasting exercises. We also include the information from a large-scale quarterly data series in some models using two approaches to capture the influence of fundamentals: extracting common factors by principal component analysis in a dynamic factor model (DFM), factor-augmented vector autoregression (FAVAR), and Bayesian FAVAR (BFAVAR) or Bayesian shrinkage in a large-scale vector autoregression (BVAR). In this study, we forecast five key macroeconomic variables, namely, output, consumption, employment, housing price inflation, and CPI-based inflation using quarterly data. The results, based on mean absolute error (MAE) and root mean squared error (RMSE) of one to eight quarters ahead out-of-sample forecasts, indicate that the non-structural models outperform the structural model for all variables of interest across all horizons. Among the non-structural models, small-scale BVAR performs better with short forecasting horizons, although DFM shows a similar predictive ability. As the forecasting horizon grows, DFM tends to improve over other models and is better suited in forecasting key macroeconomic variables at longer horizons.

The Master's Thesis includes an economic analysis of the company Pivovar Rohozec, a. s. for the period 2007 to 2012. The main goal of this thesis is to find out an achieved financial health of the brewery and also how the firm is compared with the competition. The thesis is divided into two parts, it begins with a description of the methodology, continues with the practical part, where the economic analysis of the Pivovar Rohozec, a. s. is performed. The aim of Marter's Thesis is to apprise the balance rules, the financial analysis, the effects of financial and operating leverage, the Economic Value Added (EVA) indicator, evaluate indexes for prediction of bankruptcy and creditworthiness and also the inter-company comparisons.