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Creator: Platt, Glenn J. Series: Law and economics of federalism Abstract:
This paper develops a model of firm location where communities differ by exogenous endowments of a factor of production. Firms choose to locate based on local subsidies to production. Community and firm optimal strategies are then examined. Through the introduction of information asymmetries about the communities' endowments, equilibrium bidding strategies for communities are found. The results show that auction institutions used by firms may in fact be signaling on the part of communities. These results also indicate that community bids reveal information, and restrictions on this bidding may do more harm than good.
Mot-clé: Tax breaks, Subsidies, Plant location, Tax competition, and Asymmetric information Assujettir: H70 - State and local government ; Intergovernmental relations - General, R30 - Production analysis and firm location - General, and D80 - Information, knowledge, and uncertainty - General
Creator: Velde, François R., Weber, Warren E., and Wright, Randall D. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 215 Abstract:
We develop a model of commodity money and use it to analyze the following two questions motivated by issues in monetary history: What are the conditions under which Gresham’s Law holds? And, what are the mechanics of a debasement (lowering the metallic content of coins)? The model contains light and heavy coins, imperfect information, and prices determined via bilateral bargaining. There are equilibria with neither, both, or only one type of coin in circulation. When both circulate, coins may trade by weight or by tale. We discuss the extent to which Gresham’s Law holds in the various cases. Following a debasement, the quantity of reminting depends on the incentives offered by the sovereign. Equilibria exist with positive seigniorage and a mixture of old and new coins in circulation.
Mot-clé: Commodity money, Gresham's Law, Debasement, Asymmetric information, and Random matching Assujettir: E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems and N10 - Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative