Creator: Townsend, Robert M., 1948- and Wallace, Neil Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 209 Abstract:
We use a model of pure, intertemporal exchange with spatially and information-ally separated markets to explain the existence of private securities which circulate and, hence, play a prominent role in exchange. The model, which utilizes a perfect foresight equilibrium concept, implies that a Schelling-type coordination problem can arise. It can happen that the amounts of circulating securities that are required to support an equilibrium and that are issued at the same time in informationally separated markets must satisfy restrictions not implied by individual maximization and market clearing in each market separately.
Stichwort: Schelling pure coordination game, Trade, and Debts Fach: G14 - Information and Market Efficiency; Event Studies; Insider Trading and D51 - Exchange and Production Economies
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: Levine, David K. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 388 Abstract:
Previous authors have argued that the optimal monetary policy is contractionary. If buyers value consumption substantially more than sellers, there is some randomness and informational constraints make asset trading useful, we show that there is an incentive compatible expansionary policy that dominates all incentive compatible contractionary policies.
Stichwort: Optimal monetary policy, Contraction, Trade, Private information, Asset trading, and Expansion Fach: D82 - Asymmetric and Private Information; Mechanism Design and E52 - Monetary Policy
Creator: Boldrin, Michele and Levine, David K. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 339 Abstract:
In the modern theory of growth, monopoly plays a crucial role both as a cause and an effect of innovation. Innovative firms, it is argued, would have insufficient incentive to innovate should the prospect of monopoly power not be present. This theme of monopoly runs throughout the theory of growth, international trade, and industrial organization. We argue that monopoly is neither needed for, nor a necessary consequence of, innovation. In particular, intellectual property is not necessary for, and may hurt more than help, innovation and growth. We argue that, as a practical matter, it is more likely to hurt.
Stichwort: Innovation, Capital Accumulation, Trade, Intellectual Property, and Growth Fach: O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence, F11 - Neoclassical Models of Trade, O34 - Intellectual Property and Intellectual Capital, L11 - Production, Pricing, and Market Structure; Size Distribution of Firms, L43 - Legal Monopolies and Regulation or Deregulation, and O31 - Innovation and Invention: Processes and Incentives