Professor Kent Matthews

Research interests

My recent research has been in four main areas: Modelling and forecasting the macro economy, Monetary and Credit influences on the economy, Money and Banking deregulation in developing economies and the Economics of the underground economy (including violent injury determination).

Research Grants

• 2006-2008 British Association, to examine managerial efficiency in Chinese banks, £7000
• 2002-2003 British Association, to examine the micro determinants of violent injury in Cardiff with Dr Peter Morgan £5,000
• 2000 ESRC Seminar Programme for Money, Macro, Finance Research Group with Prof. M Wickens (York) £12,000
• 1997-1999 ESRC Seminar Programme for Money, Macro, Finance Research Group with Prof. M Wickens (York) £15,000
• 1994-1996 ESRC Seminar Programme for Money, Macro, Finance Research Group with Prof. K Cuthbertson (City Univ. Bus School) and Prof. Michael Moore (Queens Belfast) £7,000.
• 1993-1994 Welsh Development Agency, to develop a regional VAR model for Wales, with C Ioannidis & K Morgan (Cardiff Bus School) £9,500.
• 1992-1994 ESRC Money Macro Finance Research Group with Prof. David Currie (London Bus School) £10,000.
• 1991-1992 IFREMER/EEC collaboration with C Ioannidis to construct an econometric model of the fresh fish market in France and Italy £13,300.
• 1986, 1988 Nuffield Foundation Travel grants for collaborative work on the US Interwar labour market £2,400.
• 1978-1991 Collaboration with Prof. Patrick Minford on Liverpool Modelling projects funded by the ESRC. Total research grants approx. £700,000.

Selected publications

Books

The Interwar Economy: An equilibrium Analysis, Gower Press, 1986, pp. 243

US and UK Unemployment Between the Wars: A Doleful Story, Hobart Paperback No 31, London: Institute of Economic Affairs, 1992, (with Dan Benjamin) pp. 174

Macroeconomics and the Market, Hampshire: Macmillan, 1994, pp. 169

The UK Economy Today, Manchester: Manchester University Press, (with K Holden and J Thompson), 1995 pp. 168

Economics, 3rd Edition, Harlow England: Addison Wesley Longman (with M Parkin and M Powell) 1997 pp. 1006

The Economics and Politics of Money: Alan Walters (Edited) Edward Elgar, 1998 pp. 400

Economics, 4th Edition, Harlow England: Pearson Education Ltd (with M Parkin and M Powell) 2000 pp. 942

Economics, 5th Edition, Harlow England: Pearson Education Ltd (with M Parkin and M Powell) 2002 pp. 841

Economics, 6th Edition, Harlow England: Pearson Education Ltd (with M Parkin and M Powell) 2005 pp. 829

The Economics of Banking, Wiley: Chichester, 2005, pp. 246 (with J Thompson)

Issues in Monetary Policy, (Edited) Chichester: John Wiley & Sons, 2006, pp. 191 (with P Booth)

The Economics of Banking, Wiley: Chichester 2008 (2nd Edition) pp 295 (with J Thompson)

Economics, 7th edition, Harlow England, Pearson Education Ltd, (with M Parkin and M Powell) 2008, pp 830

Articles Refereed

"St. Louis Models of the UK Economy" National Institute Economic Review, No 84, May 1978, pp. 65-69, (with PA Ormerod)

"A Monetary Model of Nominal Income Determination for the UK", Empirical Economics, Vol. 3, 1978, pp. 209-226

"Private Sector Expenditure and Financial Asset Accumulation, in the UK", Journal of Money, Credit and Banking, Vol. 12, No. 4, 1980, pp. 644-653, (with P Minford)

"A Rational Expectations Model of the UK under Floating Exchange Rates", European Economic Review, 14, 1980, pp. 189-219, (with P Minford and M Brech)

"Terminal Conditions as a Means of Ensuring Unique Solutions for Rational Expectations Models with Forward Expectations", Economic Letters, Vol. 4, 1980, pp. 117-120, (with P Minford and S Marwaha)

"Rational Expectations and the St. Louis Model for the UK", Empirical Economics, Vol. 6, issue 2, 1981, pp. 87-102, (with C. Ioannidis)

"Demand for Currency and the Underground Economy", Journal of Economic Studies, Vol. 9, No 2, Dec. 1982, pp. 3-22

"The Liverpool Macroeconomic Model of the United Kingdom", Economic Modelling, Vol. 1, No 1, Jan 1984, pp. 24-62, (with P Minford, S Marwaha and A Sprague)

"The GDP Residual Error and the Black Economy", Applied Economics, Vol. 16, No 3, June 1984, pp. 443-48

"Private Sector Expenditure in the Interwar Period: An Integrated Portfolio Approach", Manchester School, Vol. LIII, No 1, March 1985, pp. 23-44

"Forecasting with a Rational Expectations Model", Bulletin of the Oxford University Institute of Economics and Statistics, Vol. 47, No 4, Nov., 1985, pp. 311-336

Introductory Macroeconomic Modelling, Arestis and Hadjimatheou and Macroeconomic Systems, Challen and Hagger, Journal of Forecasting, Vol. 4, Apr/June 1985, pp. 245-247 and International Journal of Forecasting, Vol. 1, No 3, 1985, pp. 317-320 (Review article)

"Was Sterling Over-valued in 1925?", Economic History Review, Vol. XXXIX, No 4, Nov. 1986, pp. 572-587

"Unemployment in Interwar Britain: An Equilibrium Analysis", Bulletin of Economic Research, Vol. 39, No 2, 1987, pp. 151-170

"Mrs Thatcher's Economic Policies 1979-87", Economic Policy, No 5, Oct. 1987, pp. 57-101, (with P Minford)

"Was Sterling Over-valued in 1925? A Reply and Further Evidence" Economic History Review 1989 pp. 90-96.

"Could Lloyd George Have Done It ?" Oxford Economic Papers, April 1989, pp. 374-407

"The UK Economic Renaissance" Economics, August 1989, pp. 103-110

"The UK Economic Renaissance: Reply to Godley", Economics, December, 1989, pp. 163-164

"The Portfolio Effects of Foreign Exchange Intervention in a Rational Expectations Model of the UK Financial Sector", Greek Economic Review, Vol. 12, No 1, June 1990, pp. 75-103, (with J Thompson)

"Wages, Unemployment and Benefits in Inter-War Britain: An Exercise in Robust Estimation" Bulletin of Economic Research, Vol. 45, No 2, April 1993, pp 119-132 (with S Blackman)

"An Algorithm for the Solution of Non-Linear Forward Rational Expectations Models with Current Partial Information", Economic Modelling Vol. 11, No 3, July 1994, pp 351-358 (with P Minford and S Blackman)

"The Quarterly Liverpool Model with Current Partial Information: An Exercise in Forecasting", Journal of Forecasting, Vol. 13, 1994, pp 507-518, (with P Minford and S Blackman)

"Business Cycle Analysis and Forecasting with a Structural Vector Autoregression Model for Wales", Journal of Forecasting, Vol. 14, No 3, 1995, pp 251-266 (with C Ioannidis, J Laws, & B Morgan)

"The Which Money? Debate", The Review of Policy Issues, Vol. 1, No 5, Autumn, 1995, pp 3-12

"British Inflation and Unemployment in the 1970s: A Model-based Decomposition", Applied Economics, Vol. 28, 1996, pp 103-115, (with P Minford)

"Demand for Narrow and Broad Money in Uganda", African Review of Money, Finance, and Banking, Supplement. Savings and Development, Vol. 1-2, 1996, pp 69-84 (with M Atingi-Ego)

"Inflation: Too Much Money or Too Much Credit?" Manchester School, Vol. LXV, No 4, Sept. 1997 pp 411-426 (with C Ioannidis)

"Demand for Simple-Sum and Divisia Monetary Aggregates for Pakistan", Pakistan Development Review Vol. 36, autumn, 1997, pp 275-293 (with S M Tariq)

"Money, Income and Credit Relationships during the pre and post liberalization periods: Evidence from Malaysia" Applied Economics, 31, 1999, pp 1161-1170 (with M Azali)

"Have VAT Rates reached their Limit? An Empirical Note", Applied Economic Letters, 7, 2000, pp 111-115 (with J Lloyd-Williams)

"Testing a Disequilibrium Model of the Malaysian Commercial Loans Market" Singapore Economic Review, 43, 1, April 1998, pp 10-27 (with M Azali)

"A Non-Parametric Approach to Efficiency Measurement in the Malaysian Banking Sector", Singapore Economic Review, 44, 2, 1999, pp 89-114 (with M Nasser Katib)

"The VAT-Evading Firm and VAT Evasion: An Empirical Analysis", International Journal of the Economics of Business, 8, 1, 2001, pp 39-49 (with J Lloyd-Williams)

"Monetary Disequilibrium, Endogenous Money, Stability and the Determinacy of Inflation", Economic Notes, 30, 1, February, 2001 pp 145-161 (with D Chappell)

"Broad Money Demand and Financial Liberalisation in Malaysia: An Application of the Nonlinear Learning Function and ECM", Pertanika Journal of Social Sciences and Humanities, 9, 2, 2001 pp 131-141 (with M Azali)

"Financial Integration and the ASEAN-5 equity markets", Applied Economics, 18, 34, 2002, pp 2283-2288 (with W Azman-Saini, M Azali, M Habibullah)

"Trends in Violence in England and Wales 1995-2000: An Accident and Emergency perspective", Journal of Public Health Medicine, 24, 3, 2002 pp 219-226 (with V Sivarajasingham, J Shepherd, S Jones)

"VAT Evasion and VAT Avoidance: Is there a European Laffer Curve for VAT?", International Review of Applied Economics, 17, 1, 2003, pp 105-114

"Violence-Related Injury Data in England and Wales – An Alternative Data Source on Violence", British Journal of Criminology, 43, 2003 pp 223-227 (with V Sivarajasingham, J Shepherd, S Jones)

"The effect of urban closed circuit television on assault injury and violence detection". Injury Prevention, 9, 2003, pp 312-316 (with V Sivarajasingham, J Shepherd)

"Term Spread and Real Economic Activity in Korea: Was the Crisis Predictable?", Applied Economics Letters, 11, 13, 2004, pp 797-802 (with I Paya)

"The Term Spread and Real Economic Activity in the US Inter-war Period", Journal of Macroeconomics, 27, 2005, pp 331-343 (with D Peel and I Paya)

"Expected Stock Returns, Aggregate Consumption and Wealth: Some Further Empirical Evidence", forthcoming Journal of Macroeconomics, 28, 2006 pp 439 – 445 (with C Ioannidis and D Peel)

"The price of beer and violence-related injury in England and Wales", Applied Economics, 38, 2006, pp 661 – 670 (with J Shepherd and V Sivarajasingham)

"Price of Beer and violence-related injury in England and Wales", Injury, International Journal of the Care of the Injured, 3, 2006, pp 388 – 394 (with J Shepherd and V Sivarajasingham)

"Market Structure and Competitive Conditions in the Arab GCC Banking System", Journal of Banking and Finance, 30, 2006, pp 3487 - 3501 (with Saeed Al-Muharrami and Yusuf Khabari)

"The Monetary Approach to Exchange Rate Determination for Malaysia", Applied Financial Economics Letters, 3, 2007, pp91 - 94 (with Chin Lee and M Azali)

"Competitive Conditions among the major British banks", Journal of Banking and Finance, 2007, 31, 7, pp 2025 - 2042 (with V Murinde and T Zhao)

"Rational inefficiency and non-performing loans in Chinese banking', China Finance Review, 2007, 3, 1 , 55-75 (with Jianguang Guo and Xu Zhang)

"Partial Curent Information and Signal Extraction in a Rational Expectations Macroeconomic Model", Economic Modelling, 2008, 25, 255-273 (with L Lungu and P Minford)

"Too-big-to-Fail: Bank Failure and Banking Policy in Jamaica", Journal of International Financial Markets, Institutions and Money, 2008, 18, 290-303 (with J Daley and K Whitfield)

"Vicious and Virtuous Circles - the political economy of unemployment in interwar UK and USA", European Journal of Political Economy, 2008, 24, 605-614 (with P Minford and R Naraidoo)

Chapters in Books

"The Financial Model of the United Kingdom" in Exchange Rates, Money and Output: The European Experience, P De Grauwe, M Fratiani and M Nabli, Macmillan, 1985, pp. 112-122, (with J Thompson)

"The Parallel Economy: A Methodological Survey", in Issues in Political Economy: Special Issue No 1, (Ed) I S Vavouras, Athens, 1990, pp. 33-77 (in the Greek)

"Modelling the Monetary Sector" in Surveys in Monetary Economics Vol. I, Monetary Theory and Policy (Ed) C Green & D Llewellyn, Oxford: Basil Blackwell, 1991, pp. 324-378

"Macroeconomic Policy" Ch 8 in What's New in Economics?, (Ed) John Maloney, Manchester: Manchester University Press, 1992, pp. 238-284

"Illegal Demand for Currency" entry in The New Palgrave Dictionary of Money and Finance, (Ed) P Newman, M Milgate & J Eatwell, London: Macmillan, 1992, pp 329-330

"Britain's Economic Renaissance" in Britain's Economic Miracle: Myth or Reality? (Ed) N Healey, London: Routledge, 1993, pp 72-90

"Inflation and Credit Market Shocks: A Signal Extraction Problem" in Operations Research'93 - GMOOR (Eds.) A Bachem, U Derigs, M Junger, R Schrader, Heidelberg: Physica-Verlag, 1994, pp 339-342 (with C Ioannidis)

"Monetarism", in International Encyclopaedia of Business and Management, Volume Four, 1996, Thomson Business Press, London: Routledge, pp. 3523-3535

"Monetarism", International Encyclopaedia of Business and Management, (Ed M Warner, 2nd Edition) Volume Five, 2002, Thomson Learning, London: Routledge, pp. 4530-4543

"International Banks and the Washing of Dirty Money: The Economics of Money Laundering", in A Mullineaux and V Murinde (Eds.) The Handbook of International Banking, Edward Elgar, 2003, pp 546-571

"Taking on the Economic Establishment: An Appreciation of Alan Walters the Political Economist", in P Minford (Ed.) Money Matters: Essays in Honour of Alan Walters, Edward Elgar, 2004, pp 1-10

"Alan Walters and the Demand for Money: An Empirical Retrospective", in P Minford (Ed.) Money Matters: Essays in Honour of Alan Walters, Edward Elgar, 2004, pp 148-168 (with D Peel and I Paya)

"The Price of Beer and Lager and Violence-Related Injury in England and Wales: A Fixed Effects Model", in J N Yfantopoulos (Ed.) The Economics of Health Reforms, 2005, Athens Institute for Education and Research: Athens, (with V Sivarajasingham, J Shepherd, and D Peel) pp 791 - 808

'Comments on 'Financial Stability and Monetary Policy: Two Sides of the same Coin', Marrying Time Consistency in Monetary Policy with Financial Stability, (Ed) Charles Joseph, Proceedings of an International Seminar, Denpasar Bali, December 2005, Bank of Indonesia, pp 75-78

"Issues in Monetary Policy", in K Matthews and P Booth (eds.) Issues in Monetary Policy, Chichester: John Wiley & Sons, 2006, pp 1 - 7

Other Publications

"GDP Expenditure versus GDP Income: Insight into the Black Economy", Quarterly Economic Bulletin, Vol. 3, No 2, Nov. 1982, pp. 15-18

"National Income and the Black Economy", Journal of Economic Affairs, Vol. 3, No 4, July 1983, pp. 261-267

"Unemployment Between the Wars: Lessons for Today", Quarterly Economic Bulletin, Vol. 5, No 2, May 1984, pp. 25-29

"High Wages Cause Unemployment", Economic Affairs, Apr-June 1985, pp. 6-11

"Little M0 and the Moonlighters", Quarterly Economic Bulletin, Vol. 6, No 2, June 1985, pp. 21-24, (with A Rastogi)

"Policy Alternatives before and after the Next Election", Quarterly Economic Bulletin, Vol. 6, No 4, Dec. 1985, pp. 25-29

"Do High Wages Cause Unemployment?: Reply", Economic Affairs, Apr-May 1986, pp. 44-45

"The Forecast Performance of the Liverpool Group", Quarterly Economic Bulletin, Vol. 7, No 1, Mar 1986, pp. 25-31, (with P Minford and J Riley)

"The Thatcher Experiment: 1980 Revisited", Quarterly Economic Bulletin, Vol. 7, No 3, Sept. 1986, pp. 25-28

"The Black Economy: The Evidence from Merseyside", Quarterly Economic Bulletin, Vol. 8, No 2, June 1987, pp. 26-36, (with P Stoney)

"Why the Credit Boom is no Bad Thing", Economic Affairs, June-Jul. 1988, pp. 8-14

"Overheating and the Credit Boom: A Tenuous Link?", Quarterly Economic Bulletin, Vol. 9, No 2, June 1988, pp. 30-36

"Black Monday and the Crash of Voodoo Economics", Quarterly Economic Bulletin, Vol. 9, No 4, Dec. 1988, pp. 26-30, (with P De Grauwe)

"UK Skills Shortage: Short Term Problem or Long Term Crisis ?", Quarterly Economic Bulletin Vol. 10, No 1, March 1989, pp. 28-32

"The Thatcher Economic Revolution: Myth or Reality ?", Quarterly Economic Bulletin, Vol. 10, No 2, June 1989, pp. 25-35

"Forecasting with the Liverpool Model: The Challenge and the Record", Quarterly Economic Bulletin Vol. 10, No 4, Dec., 1989 pp. 25-36, (with J Riley)

"Explaining Mrs Thatcher's Success", Economic Affairs, Vol. 10, January 1990, pp. 10-16, (with P Stoney)

"Ten Years of the Liverpool Model: A Personal Reflection", Quarterly Economic Bulletin, Vol. 11, No 1, March, pp. 30-34

"Inflation in the 80s: A Tale of two Moneys", Quarterly Economic Bulletin, Vol. 12, No 4, December 1991, pp. 23-28 (with C Ioannidis)

"Unemployment: A Lesson from All Our Yesterdays", Economic Affairs, February, Vol. 13, No 2, 1993 pp 11-14

"Unemployment in the 90s and Lessons of the 30s", Quarterly Economic Bulletin, Vol. 14, No 1, March, 1993 pp 25-28

"Recession and Recovery in the 90s", Quarterly and Economic Manpower Survey, Liverpool Chamber of Commerce, Jan-Mar 1994, pp 2-5

"The Stagflation of the Seventies: A Quantitative Analysis", Quarterly Economic Bulletin, Vol. 15, No 1, March, 1994 pp 26-32 (with P Minford)

"Business Cycle Analysis with a VAR Model for Wales", Welsh Economic Review, Vol. 8, No 1, Spring, 1994 pp 44-52 (with C Ioannidis, J Laws & B Morgan)

"Pleasing the City but not the Voter", Parliamentary Brief, Vol. 3, No 3, December 1994, p9, ISSN 1354-5507

"Does Overfunding Really Reduce Inflation?", Quarterly Economic Bulletin, Vol. 16, No 3, October, 1995 pp 30-36 (with J Thompson)

"The Chancellor, Professor Lucas and the Bond Market", Parliamentary Review, Winter 1995, pp 20-22,

"Central Bank Independence", Updates in Economics, Vol. 6, autumn, 1997, (Ed) Brian Atkinson, ISBN 0-201-36054-3

"Macroeconomic Management", Economic Affairs, Vol. 19, No 1, March 1999, pp 2-4

"The Monetary Policy Committee: An end-of-term-evaluation", Economic Affairs, Vol. 19, No 4, December 1999, pp 31-36

"The Business Cycle in the Japanese Economy 1971-94: A Kaleckian View", Bulletin of the Research Institute, St. Andrews University, 27, 1, July, 2001, pp 57-75 (with M Iyoda)

"A Kaldorian Analysis: An Application of a Kaldorian Model of the Japanese Economy 1971-93", Bulletin of the Research Institute, St. Andrews University, 28, 1, July, 2002, pp 93-104 (with M Iyoda)

Official Reports

"The Regional Economic Effects of the Second Severn Bridge" (with C Ioannidis) Appendix III of Second Severn Crossing: Economic Impact Study, Final Report by PIEDA plc to the Department of Employment, Ref.: 6860, June 1992

"An Investigation into the Contract Guarantee Market for the Construction Industry", FABER Group Report for the Confederation of Construction Specialists, University of Wales Cardiff, Cardiff Business School, 1993 (with C Ioannidis, & M Silver)

"Determination of Fresh Cod and Haddock Margins in the UK 1988-1992", Cardiff Economic Research Associates, for Sea Fish Industry Authority, May 1994, (with C Ioannidis)

"An Investigation into VAT Recovery in the Restaurant and Take-Out Sectors of the Economy", Liverpool Macroeconomic Research Group, for HM Customs & Excise, April 1995, (with P Stoney, and J Lloyd-Williams)

"Report on Excise Duty Compliance in the Betting and Gaming, Alcohol, and Tobacco Industries, Cardiff Economic Research Associates and Liverpool Business School, for HM Customs & Excise, April 1996 (with J Lloyd-Williams)

"VAT Compliance in the Clothing and Footwear, Furniture and Floor Coverings, Hair Dressing, and Football Club Sectors of the Economy", Cardiff Economic Research Associates and Liverpool Business School, April 1996 (with J Lloyd-Williams)

"An Investigation into VAT Recovery in the Restaurant and Take-Out Sectors of the Economy: An Update", Cardiff Economic Research Associates, for HM Customs & Excise, July 1996, (with J Lloyd-Williams)

"A Scoping Study into VAT Compliance in the Construction Sector", Cardiff Economic Research Associates, for HM Customs & Excise, April 1996, (with J Laws)

"A Scoping Study into VAT Avoidance in the Financial Sector", Cardiff Economic Research Associates, for HM Customs & Excise, October 1996, (with J Lloyd-Williams)

"Price Interaction and Rational Learning in a Duopolistic Framework", Cardiff Business School Report to Unilever plc December 1997, (with D Byers)

"The Market for High-Loan-to-Value Mortgages: A Confidential Report to FirstPlus plc", Cardiff Economic Research Associates, January 1999 (with S Norton, and D Simpson)

"What's in a Name? Valuing the Brand Name FirstPlus: A Confidential Report to FirstPlus Financial Group plc", Cardiff Economic Research Associates, May 2000, (with C Katsikeas and A Kaleka)

"Supplement to Valuing the Brand Name FirstPlus: A Sensitivity Analysis", Cardiff Economic Research Associates, July 2000, (with C Katsikeas and A Kaleka)

"An Investigation into the Potential Financial and Economic Risks for FirstPlus in the event of UK entry into European Monetary Union, and Potential Strategies for Risk Management and Preservation of its existing lines of Business: A Confidential Report to FirstPlus Financial Group plc", Cardiff Economic Research Associates, August 2001, (with S Norton)

"A Strategy for Business: A Confidential Report to FirstPlus Financial Group plc", Cardiff Economic Research Associates, September 2002, (with A Kaleka, C Ioannidis)

"The Risk of Early Settlement: A Confidential Report to FirstPlus Financial Group plc", Cardiff Economic Research Associates, May 2003, (with C Ioannidis)

"A Value-at-Risk Analysis of Interest Income Loss from Early Settlement: A Confidential Report to FirstPlus Financial Group plc", Cardiff Economic Research Associates, November 2003, (with C Ioannidis)

"A Comment on the Rationale being used by Treasury/Customs for the new VAT forecasting model", Cardiff Economic Research Associates, Report to the National Audit Office, April 2004

"The Risk of Early Settlement of Car Loans: A Confidential Report to Julian Hodge Bank", Cardiff Economic Research Associates, May 2005 (with C Ioannidis)

"Review of the VAT gap methodology use by HMRC: A Report to the NAO", Cardiff Economic Research Associates, March 2007 (with C Ioannidis)