Future mobile communications systems reaching for ever increasing data rates require higher bandwidths than those typical used in today’s cellular systems. By going to higher bandwidth the (for low bandwidth) flat fading radio channel becomes frequency selective and time dispersive. Due to its inherent robustness against time dispersion Orthogonal Frequency Division Multiplex (OFDM) is an attractive candidate for such future mobile communication systems. OFDM partitions the available bandwidth into many subchannels with much lower bandwidth. Such a narrowband subchannel experiences now due to its low bandwidth an almost flat fading leading in addition to above mentioned robustness also to simple implementations. However, one potential drawback with OFDM modulation is the high Peak to Average Ratio (PAR) of the transmitted signal: The signal transmitted by the OFDM system is the superposition of all signals transmitted in the narrowband subchannels. The transmit signal has then due to the central limit theorem a Gaussian distribution leading to high peak values compared to the average power. A system design not taking this into account will have a high clip rate: Each signal sample that is beyond the saturation limit of the power amplifier suffers either clipping to this limit value or other non-linear distortion, both creating additional bit errors in the receiver. One possibility to avoid clipping is to design the system for very high signal peaks. However, this approach leads to very high power consumption (since the power amplifier must have high supply rails) and also complex power amplifiers. The preferred solution is therefore to apply digital signal processing that reduces such high peak values in the transmitted signal thus avoiding clipping. These methods are commonly referred to as PAR reduction. PAR reduction methods can be categorized into transparent methods – here the receiver is not aware of the reduction scheme applied by the transmitter – and non-transparent methods where the receiver needs to know the PAR algorithm applied by the transmitter. This master thesis would focus on transparent PAR reduction algorithms. The performance of PAR reduction method will be analysed both with and without the PSD constrained. The effect of error power on data tones due to clipping will be investigated in this report.