This authoritative collection of papers covers a broad spectrum of topics in theoretical and applied economics and econometrics. The tone of the book is set by Paul Klemperer#s contribution on using and abusing economic theory, in which academics are encouraged to widen the scope of their analyses beyond the confines of elegant models which sometimes lack #real-world# detail. As a result, many of the chapters in this volume share a high degree of practical relevance. Contents: Foreword Part I: Economic Theory 1. Using and Abusing Economic Theory 2. Industry Sunk Cost and Entry Part II: Econometric Theory 3. Sub-Sample Model Selection Procedures in Gets Modelling 4. A Gibbs#s Sampler for the Parameters of a Truncated Multivariate Normal Distribution 5. A Necessary and Sufficient Condition for Weak-Exogeneity in Vector Error Correction Models 6. Bayesian Graphical Inference for Economic Time-Series that may have Stochastic or Deterministic Trends Part III: Applications 7. The Impact of Monetary Policy in the UK on the Relationship between the Term Structure of Interest Rates and Future Inflation 8. Missing Data and Interpolation in Dynamic Term-Structure Models 9. Choosing Lag Lengths in Nonlinear Dynamic Models 10. D-TAR versus C-TAR Models? 11. Predicting Incomplete Observations in Unbalanced Panels: A Kalman Filtering-Smoothing Approach Index Contributors include: H. Anderson, G. Bardsen, R. Becker, H. Doran, W. Enders, W. Griffiths, D. Hendry, R.C. Hill, S. Hurn, P. Klemperer, H.-M. Krolzig, J.M. Marriott, J.C. Naylor, V. Pavlov, A. Rambaldi, C. Rault, P. Siklos, V. Smirnov, A. Tremayne, A. Wait