The Compatibility of Capital Controls and Financial Development.ppt..pptVIP

Discussion ofCan Parameter Instability Explain theMeese-Rogoff Puzzle?by P. Bachetta, E. van Wincoop and T. Beutler Menzie D. Chinn UW-Madison and NBER Outline What have others tried What is done in this paper Should we expect time variation? Different types of time variation Additional variables, again What Others Have Tried Meese-Rogoff showed standard models could not outpredict a random walk in ex post historical simulations This is not a necessary implication of market efficiency Functional form (nonlinearity, thresholds) Panel regressions Regime switching Additional variables The Pap