Suchergebnisse

Abstract.  I examine the effectiveness of exchange rate intervention within the context of a Markov‐switching model for the real dollar–yen exchange rate over the period April 1991–December 2003. The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of the regime. I find that intervention increases the probability of stability when the rate is misaligned, and that its influence grows with the degree of misalignment. However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability.

I examine the effectiveness of exchange rate intervention within the context of a Markov‐switching model for the real exchange rate. The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of the regime. Applying this to dollar–mark data for the period 1985–98, I find that intervention increases the probability of stability when the rate is misaligned, and that its influence grows with the degree of misalignment. However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability.

Liquidity constraints can prohibit potential entrepreneurs from starting up in business, can restrict the growth of existing entrepreneurial activities and, in the extreme, can result in small business failure. This paper uses British panel data to investigate the effects of relaxing liquidity constraints on self–employment through the unanticipated receipt of windfall gains. It discusses the different impacts the receipt of a windfall payment may have on self–employment. The results suggest that the size of the payment received has a positive and concave effect on the probability of entering self–employment and on the performance of an existing self–employment enterprise, consistent with the liquidity constraint hypothesis.