Creator: Marimon, Ramon, 1953- and Wallace, Neil Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 288 Abstract:
The consequences of costly divisibility of assets are studied using a model with the following features. The demand for assets is generated from an overlapping generations model with a continuum of agents in each generation and with intra-generation trade (intermediation) ruled out. There is a once-for-all supply of a stock of nonnegative-dividend assets in a large size, and there is a costly technology for dividing them into smaller sizes. Stationary equilibria are shown to exist. In contrast with similar models with costless divisibility of assets, competitive equilibria are not necessarily desirable; there can be Pareto-ordered equilibria.
Stichwort: Depreciation, Asset, and Trade Fach: D50 - General Equilibrium and Disequilibrium: General
Creator: Chari, V. V., Jones, Larry E., and Marimon, Ramon, 1953- Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 582 Abstract:
In U.S. elections, voters often vote for candidates from different parties for president and Congress. Voters also express dissatisfaction with the performance of Congress as a whole and satisfaction with their own representative. We develop a model of split-ticket voting in which government spending is financed by uniform taxes but the benefits from this spending are concentrated. While the model generates split-ticket voting, overall spending is too high only if the president’s powers are limited. Overall spending is too high in a parliamentary system, and our model can be used as the basis of an argument for term limits.
Fach: H40 - Publicly Provided Goods: General, H00 - Public Economics: General, and H30 - Fiscal Policies and Behavior of Economic Agents: General
Creator: Marimon, Ramon, 1953-, Nicolini, Juan Pablo, and Teles, Pedro Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 467 Abstract:
The interplay between competition and trust as efficiency-enhancing mechanisms in the private provision of money is studied. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on efficiency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved. The quality of money can be observed only after its purchasing capacity is realized. In this sense, money is an experience good.
Stichwort: Inflation, Currency competition, and Trust Fach: E40 - Money and Interest Rates: General, E58 - Central Banks and Their Policies, E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General, and E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General