The views expressed in this paper are those of the authors. No responsibility for them should be attributed to the Bank of Canada. iii Contents

The views expressed in this paper are those of the authors. No responsibility for them should be attributed to the Bank of Canada. iii Table of Contents Acknowledgements.................................................................................................................... iv Abstract / Résumé....................................................................................................................... v 1. Introduction............................................................................................................................ 1

to stimulate discussion and critical comment. References in publications to International Finance Discussion Papers (other than an acknowledgment that the writer has This paper develops a constant, data-coherent, error correction model for broad money demand (M3) in Greece. This model contributes to a better understanding of the e®ects of monetary policy in Greece, and of the portfolio consequences of ¯nancial innovation in general. The broad monetary aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines, yet analysis of this aggregate has been dormant for over a decade. In spite of large °uctuations in the in°ation rate, introduction of new ¯nancial instruments, and liberalization of the ¯nancial system, the estimated model is remarkably stable. The dynamics of money demand are important, with price and income elasticities being much smaller in the short run than in the long run.

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Exchange rate volatility

The views expressed herein are those of the authors and do not necessarily reflect those of the Reserve Bank of Australia, the Board of Governors of This paper develops an empirically constant, data-coherent, error correction model for inflation in Australia. The level of consumer prices is a mark-up over domestic and import costs, with adjustments for dynamics and relative aggregate demand. We address issues of cointegration, general to specific modelling, dynamic specification, model evaluation and testing, parameter constancy, and exogeneity. We also test this model against existing models of Australian prices: this model encompasses (but is not encompassed by) the existing models.

Recent research has found evidence that supports the purchasing power parity (PPP) condition in developed countries using very long-span data, while evidence for developing countries is almost nonexistent. This paper tries to fulfill this void by testing the validity of PPP as a long run equilibrium condition for Chile, using data, since its birth as a nation, developed by Díaz, Lüders and Wagner (2003). A battery of unit-root and cointegration tests is applied. We found evidence in favor of PPP. Results are robust to changes in the domestic price index, to changes in the sample period, and to the econometric technique applied. Resumen Recientes investigaciones han encontrado evidencia a favor de la condición de paridad de poder de compra (PPC) en países desarrollados usando muy larga data, sin embargo en países en desarrollo la evidencia casi no existe. Este artículo intenta llenar ese vacío evaluando la validez de largo plazo de la PPC para Chile desde 1810, usando data de Díaz, Lüders y Wagner (2003). Aplicamos una batería de tests de raíz unitaria y cointegración encontrando evidencia a favor de PPC. Los resultados son robustos a diferentes índices de precios, tamaño de muestra y especificaciones de tests.

paper examines the relationship between Australian and world strike activity between 1960 and 1998. Appropriate indices are constructed for which evidence of a long-run equilibrium relation is found between Australian and world strike activity. The evidence suggests Australian and world strike rate indices are cointegrated with a breakpoint in that relation occurring sometime in the very late 1960s or early 1970s. No breakpoints are in evidence before, during or after the period (1983-96) of the Accord. This result is consistent with the view that the decline in strike activity in Australia during the period of the Accord was not a singularly Australian experience

present form of the paper was mainly completed while the writers were visiting scholars at the Department of Economics, University of Wollongong in the Second Semester, 2000. We thank the staff there and the journal’s referees for their valued comments on various versions of this paper. The This paper examines the relationship between Australian and world strike activity between 1960 and 1998. Appropriate indices are constructed for which evidence of a long-run equilibrium relation is found between Australian and world strike activity. The evidence suggests Australian and world strike rate indices are cointegrated with a breakpoint in that relation occurring sometime in the very late 1960s or early 1970s. No breakpoints are in evidence before, during or after the period (1983-96) of the Accord. This result is consistent with the view that the decline in strike activity in Australia during the period of the Accord was not a singularly Australian experience. The purpose of this paper is to analyse the relation, if any, between local (Australian) strike activity and world strike activity. In section I we review the issues associated with strikes focussing on a number of studies that have argued that the moderation in the strike rate over the last decade or so in Australia can be attributed to the Accord (an incomes policy between government and trade unions). In section II we establish a framework for testing the presence or otherwise of a long-term equilibrium relation between local and world strike activity drawing on, in particular, the methodology of Zivot and Andrews (1992) and Gregory and Hanson (1996a, 1996b). Section III applies local and world strike data to the framework established in section II. It will be seen that the tests carried out suggest the presence of a long-term equilibrium relation between local and world strike activity, as well as the presence of structural changes in that relationship. Finally, conclusions are drawn in Section IV