The first essay formulates a dynamic rational contagion model in order to analyse the evolution of speculative bubbles. The model consists of two laws of motion: the speculative bubble and the probability of the bubble. The rst essay shows that the model has two stable equilibria and one unstable equilibrium. The dynamics of both the nonlinear speculative bubbles and the probability interact to form two stable equilibria and one unstable equilibrium which lead to ballooning and busting of the speculative bubbles. These features of speculative bubbles are driven by the speculators’s herd behaviour, the bubbles size, the speed of change, the strength of infection, and the effects of both the bubbles and the short-term interest rate on the transition probability. The second essay extracts speculative bubbles from two nancial markets: the foreign exchange and the stock markets for South Africa between 1995Q2 and 2008Q4. The second essay uses the no-arbitrage models for the exchange rate and the stock price. By invoking the rational bubbles theory and using the residuals, we compute the asset price bubbles using the expectational restriction for rational bubbles theory. Three robustness checks on the computed bubbles con rm that speculative bubbles are present in the stock price and the exchange rate. By using iii Abstract iv graphs of speculative bubbles, we show that the speculative bubbles are consistent with the existence of bubble episodes as documented in the literature. The third essay formulates a macro-model of a small-open economy in order to investigate the relative performance of optimal monetary policy rules that respond to speculative bubbles and those that do not. The model consists of two nonlinear speculative bubbles: the stock price and the exchange rate bubbles. These speculative bubbles interact with the IS curve, the Phillips curve and the asset prices. The ndings show that policy rules that respond to speculative bubbles dominate rules that do not.

by Leung Hau Bun. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1981. / Bibliography: leaves 63-64.

by Allen Lo Hok Wai and Adolf Ho Ping Yau. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1981. / Bibliography: leaves 133-134.

by Kwan Chi Tak. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1999. / Includes bibliographical references (leaves 44-45). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF FIGURES --- p.vi / LIST OF TABLES --- p.vii / ACKNOWLEDGEMENT --- p.viii / CHAPTER / Chapter I. --- OBJECTIVES AND METHODOLOGY --- p.1 / Objectives --- p.1 / Methodology --- p.1 / Data Source --- p.1 / Analysis on the Efficiency of Secondary Bond Market --- p.1 / Data Collected --- p.2 / Period of Investigation --- p.2 / Bonds Selected --- p.3 / Interviews --- p.3 / Chapter II. --- DEVELOPMENT OF BOND MARKET IN CHINA --- p.4 / Amount of Issue --- p.4 / Types of Bonds Available in China --- p.5 / Government Bonds --- p.6 / Policy Financial Bonds --- p.7 / Enterprise Bonds --- p.7 / Conclusion --- p.7 / Chapter III. --- DEVELOPMENT OF GOVERNMENT BOND MARKET --- p.9 / Background --- p.9 / Issuance Methods --- p.9 / Types --- p.11 / Cost of Issuance and Redemption --- p.12 / The Establishment of Secondary Market --- p.13 / Conclusion --- p.14 / Chapter IV. --- GOVERNMENT DEFICIT FINANCING --- p.16 / The Economy of China --- p.17 / Government revenues and Expenditures --- p.17 / Deficits --- p.19 / Government Bond Issuance --- p.21 / repayment Ability --- p.22 / Conclusion --- p.23 / Chapter V. --- BENCHMARK RATES --- p.23 / Primary Market --- p.23 / Interest Rates --- p.23 / Government Bond Coupons --- p.24 / Anomaly --- p.24 / Pricing of other securities --- p.25 / secondary market --- p.25 / Efficiency of Secondary Bond Market --- p.27 / Conclusion --- p.29 / Chapter VI. --- OPEN MARKET OPERATIONS --- p.30 / Background --- p.30 / Open Market Operations --- p.30 / The Effectiveness --- p.31 / Conclusion --- p.33 / Chapter VII. --- OTHER FACTORS --- p.34 / Education --- p.34 / Institutional Investors --- p.34 / Transaction Costs --- p.35 / Distribution --- p.35 / Transaction Fees --- p.35 / Conclusion --- p.36 / Chapter VIII. --- CONCLUSIONS AND RECOMMENDATIONS --- p.37 / Conclusions --- p.37 / Positive Factors --- p.37 / Negative Factors --- p.38 / Recommendations --- p.39 / Chapter IX. --- APPENDIX I --- p.41 / Chapter X. --- APPENDIX --- p.43 / Chapter XI. --- BIBLIOGRAPHY --- p.44

Previously, the rich customers bought expensive luxury goods, the impoverished customers bought cheap low quality merchandise and the middle class customers stayed true and loyal to the middle market. However, today there has been a change in the customer shopping behaviour, especially among the middle class customers who no longer want to be stuck in mediocrity. Either the customers “trade up”, which means that they buy goods with higher price and quality; or they “trade down”, which means that they buy cheaper low quality goods. This has created a change, which means that around the world, premium and no-frills products are squeezing middle-of-the-road products and services. Sales in the middle market are pressed while sales on both the top end and the bottom end of the market are rapidly growing. The market conditions are changing and this thesis is written with the purpose to analyse the given market situation - giving companies, primarily in the fashion industry, an opportunity to overview the possibilities for positioning on a market where the gap between discount and premium brands is getting bigger. Obviously, the phenomenon of market polarization will continue and the pressure on the companies to change will increase. This thesis discus therefore how a company can position and reposition itself in the emerging and ever changing environment. Three companies have been researched – Helly Hansen, Pennyblack and Nova Star. The choice of the companies have been made on the basis of all being active on the Scandinavian middle market practicing in three different parts of the fashion industry, which gives this study a broader approach. The study is qualitative and based on interviews with representatives from each company. After conducting the interviews and analysing the empirical framework, the conclusions suggest that the most beneficial way for a company to position itself on the current saturated market is by differentiating themselves, providing something that the competitors cannot offer. Nevertheless, the differentiation has nowadays become more complex and convoluted. This happened since the saturation has made attributes that previously have been seen as unique - such as for example, superior quality and design, to be mainly common. The saturated market leads to more and more tough competition between the companies. The study shows that this actually is the reason making the companies to try to make profit everywhere, attempting to reach people that should not fall within their targeted segment. On the contrary, it is more beneficial to target as narrowly as possible, specifically aiming at the consumers that would actually benefit form the products a company offers. Lastly, the results indicate that the International brands attempting to enter the Scandinavian market should be prepared to adjust their strategies, since the Scandinavian market seems to be different from the rest of the world. / Program: Master in Fashion Management with specialisation in Fashion Marketing and Retailing

The development of time series techniques associated with non stationary data, such as the testing for unit roots and cointegration has presented the applied worker with new challenges in the applied analysis of economic problems.This thesis uses some of these methods to consider a number of questions in the area of labour and financial markets.In particular the thesis considers the application of these methods to two general questions, the specification of the aggregate wage equation in Australia and the efficiency of the Australian stock market. More specifically the thesis focuses on the time series properties of variables commonly used in specifications of the wage equation and then tests them for cointegration. In the financial economics area the thesis tests for the gains to portfolio diversification from the perspective of an Australian investor and the applicability of the present value model of stock prices to the Australian stock market.

This thesis involved an empirical investigation of the predictability of Australian industrial stock returns using a dynamic state-space framework. The systematic risks of industrial portfolios were examined in a stochastic market- model. The systematic risks of industry portfolios are found to be stochastic processes. Most of the industry groups have time-varying systematic risks that are mean-reverting to their stable or moving long-term mean. However, the investment and financial services, alcohol and tobacco, gold, insurance and media industry groups have rather random systematic risks. The time-varying market model provides a better explanation of the portfolio returns than the single-index model since it captures the stochastic properties of market risk. Further, a Bayesian dynamic-forecasting model was employed to examine the explanatory power of a set of economic and financial variables. The unanticipated components of the term-structure variable, the interest-rate variable and the aggregate-dividend-yield variable were shown to be significant in explaining the industry portfolio excess returns. The comparison between multivariate analysis and univariate analysis strongly indicates that the correlations within industries are critical in the investigation of the predictability of returns. In the out-of-sample analysis, a maximally predicted portfolio (MPP) was constructed based on the updated economic and financial information; however, the predictability of the MPP did not exceed that of a naive forecast. / Furthermore, the market timing ability associated with the predictability of the MPP was insignificant. The industry-group-rotation strategy is able to enhance the industry portfolio performance, but the predictability only contributes a small proportion of the profits. The results indicate that the industry returns contain predictive components; however, investors are less likely to exploit the existing predictability to gain excess profit. The level of predictability discovered here does not contradict market-efficiency theory.

This thesis consists of four self-contained papers related to the Nordic electricity market. Paper [I] examine how the reform of the Nordic electricity markets has affected competition in the electric power supply market, Nord Pool. The question is if the common power market has been competitive or if electric power generators have had market power during the period 1996 -2004. Moreover, since there was a stepwise evolution from national markets to a multinational power market, we also ask how the degree of market power has evolved during this integration process. The results show that electric power generators have had a small, but statistically significant, degree of market power during the whole period.  However, studying the integration effect, i.e. how the market power has been affected by additional countries joining Nord Pool, it show that the degree of market power has been reduced and finally vanished as the market has expanded and more countries joined the collaboration. Paper [II] analyse how the deregulation of the Swedish electricity market has affected the price of electric power and how the change in electric power price, in turn, has affected consumers’ welfare. The result shows that the change in pricing principle of electric power following the deregulation has increased consumer welfare over the period studied (1996-2006), with welfare gains about 100 SEK per customer per year, indicating a three per cent welfare gain for the average customer. Paper [III] study whether (and to what extent) the multinational electricity market integration has affected the price dynamics at the Nordic power exchange. The results shows that a larger electricity market seems to reduce the probability of sudden price jumps, but also that the effect on volatility seem to depend on the characteristics, i.e. production structure, of the integrated markets. In Paper [IV] a two-stage study is conducted to investigate the extent to which shocks in the demand and supply for electricity translate into price jumps, and the extent to which this process is affected by the prevailing market structure. The main findings from the study is that whether demand and supply shocks translate into price jumps largely depends on the prevailing market structure, i.e. on how far the market works from capacity constraints. A notable feature of the empirical analysis is also that the marginal effects from positive demand and negative supply shocks on the jump probabilities are mostly insignificant and of small magnitude.

In the past, the Swedish bond market has been distinguished for its illiquidity and difficulties with retrieving information. This is the starting point of our thesis and the purpose is to analyze and describe the availability of the present corporate bond market for manufacturing firms in Sweden. In order to fulfill the purpose, a qualitative method was used and interviews with different operators of the market were conducted. Our respondents were sampled from large issuing companies, the major intermediaries and companies that have not tried bonds as a financing tool. To fulfill our purpose, we analyzed subjects as credit rating, capital market segmentation, regulations and volume. We came to the conclusion that the Swedish corporate bond market is somewhat underdeveloped. This is due to the lack of public information regarding the bonds, such as prices, outstanding bonds and interest rates. The availability for already active companies is good, mainly due to the important role the intermediaries play. The regulations set by authorities do not have great effect on the large companies in general, since they issue large amounts, the cost associated with the regulations do not affect them in a considerable way. One could rather see a positive side with the regulations, for example the increase of foreign issuers that entered the market the last couple of years and hence increasing the liquidity. A credit rating is sometimes beneficial but not always, it is not a necessity to enter the bond market. As a matter of fact, it seems like volume is the most important reason to why medium-sized companies have limited access to the market. Since the minimum recommended volume to issue is 50 million SEK, many companies are excluded due to lack of financing need. Another important factor concerning medium-sized companies is that they do not have sufficient experience, knowledge or interest in the bond market. There are probably companies that would like to enter the bond market, who do not have the opportunity to do so, but this do not have anything to do with the lack of credit rating, rather the high cost associated with it. The conclusion drawn is that it is hard to compare small and medium-sized companies with large already established actors. This is due to different need of capital and overall knowledge about the debt market.

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