Ekonomia The journal of the
Cyprus Economic Society
(formerly The Cyprus Journal of Economics)

Volume 8, No 2, December 1995


A Window on Econometrics
DAVID F. HENDRY and JURGEN A.DOORNIK

This paper illustrates how econometricians practice their subject using primarily graphical tools. It is based on software which exploits the Windows operating system to show data, results, reports, and graphics simultaneously on screen and seeks to capture the interactions which were used in the associated lecture to highlight the learning process involved in econometric modelling. The substantive application is a model of the UK inflation process over the past century, which finds an important role for excess demand for goods and services, with additional pressures from excess money, national debt, and deviations from purchasing power parity.

Financial Innovation, Wealth Effects and Monetary Union
KEITH BAIN

The importance for monetary policy of the recent burst of financial innovation in developed economies has mainly been considered through its impacts on the housing market and the demand for money while its impact on the size and composition of net wealth has largely been neglected. This paper summarizes housing market and demand for money arguments and outlines many possible wealth effects arising from financial innovation. It concludes that the number of such influences is so great that it is extremely difficult even to determine whether it has been advantageous or disadvantageous for monetary policy.

The Causal Relationship Between Tax Revenues and Goverment Spending in Greece: 1950-90
CHRISTOS KOLLIAS and STELIOS MAKRYDAKIS

This paper investigates the direction of causality between tax revenues and government spending in the case of Greece. The empirical methodology employed is that of cointegration and error correction which provides additional channels through which causality between two variables can be established. The findings reveal unidirectional causality from government spending to tax revenues which suggests that tax and spending decisions are not made jointly by the Greek fiscal authorities.

Last modified: Thu May 11 13:25:09 EEST 2000