Creator: Boot, Arnoud W. A. (Willem Alexander), 1960-, Greenbaum, Stuart I., and Thakor, Anjan V. Series: Monetary theory and financial intermediation Abstract:
We explain why contracting parties may choose ambiguous financial contracts. Introducing ambiguity may be optimal, even when unambiguous contracts can be costlessly written. We show that an ambiguous contract has two advantages. First, it permits the guarantor to sacrifice reputational capital in order to preserve financial capital as well as information reusability in states where such tradeoff is optimal. Second, it fosters the development of reputation. This theory is then used to explain ambiguity in mutual fund contracts, bank loan commitments, bank holding company relationships, the investment banker's "highly confident" letter, non-recourse debt contracts in project financing, and other financial contracts.
学科: G20 - Financial Institutions and Services: General, K12 - Contract Law, and D86 - Information, knowledge, and uncertainty - Economics of contract : Theory
Creator: Ray, Debraj. and Streufert, Peter A. Series: Models of economic growth and development Abstract:
We incorporate the consumption-ability relationship of static "efficiency wage" models into a dynamic general equilibrium model. We show that for many aggregate land stocks, there is a continuum of unemployment rates which could persist indefinitely as part of a stationary equilibrium. For many of these aggregate land stocks, both unemployment and full employment are distrinct possibilities. Broadly speaking, more unemployment corresponds to more undernourishment and more inequality in land distribution. Thus our results suggest that the market mechanism is less efficacious than land reform in reducing unemployment and undernourishment.
学科: J41 - Particular labor markets - Labor contracts, F41 - Macroeconomic aspects of international trade and finance - Open economy macroeconomics, and O42 - Economic growth and aggregate productivity - Monetary growth models
Creator: Townsend, Robert M., 1948- Series: Financial history conference Abstract:
ln environments with private information and spatial separation, the ability of agents to establish mutually beneficial arrangements can be limited by their ability to communicate contemporary dealings and histories of past dealings. Indeed, with the extension of some recent work in contract theory and mechanism design, this paper argues that location or person-specific assignment systems, portable object record-keeping systems, written message systems, and telecommunication systems can be viewed as communication systems which are successively more complete in this sense. An attempt is made also to match these various communication systems with systems in use in historical primitive, and/or contemporary societies and to interpret these communication systems as financial structures.
学科: C44 - Operations Research; Statistical Decision Theory, D83 - Information, knowledge, and uncertainty - Search ; Learning ; Information and knowledge ; Communication ; Belief, and D23 - Organizational Behavior; Transaction Costs; Property Rights
Creator: Hammill, James H. and Nelson, Clarence W. (Clarence Walford), 1924- 描述:
The Reserve-o-Meter was a tool used in presentations given by Clarence Nelson and James Hammill. From the August 6, 1993 presentation entitled Monetary Policy, Fiscal Policy and the Economy: What are Policy Goals and how does Policy Work, the Reserve-o-Meter is described as "an analog computer by which you can study the leverage or reserve-to-deposit multiplier for any bank." Included here are front and back images of the Reserve-o-Meter, the full presentation text and accompanying slides.
Creator: Kiyotaki, Nobuhiro, Matsui, Akihiko, and Matsuyama, Kiminori Series: Monetary theory and financial intermediation Abstract:
Our goal is to provide a theoretical framework in which both positive and normative aspects of international currency can be addressed in a systematic way. To this end, we use the framework of random matching games and develop a two country model of the world economy, in which two national fiat currencies compete and may be circulated as media of exchange. There are multiple equilibria, which differ in the areas of circulation of the two currencies. In one equilibrium, the two national currencies are circulated only locally. In another, one of the national currencies is circulated as an international currency. There is also an equilibrium in which both currencies are accepted internationally. We also find an equilibrium in which the two currencies are directly exchanged. The existence conditions of these equilibria are characterized, using the relative country size and the degree of economic integration as the key parameters. In order to generate sharper predictions in the presence of multiple equilibria, we discuss an evolutionary approach to equilibrium selection, which is used to explain the evolution of the international currency as the two economies become more integrated. Some welfare implications are also discussed. For example, a country can improve its national welfare by letting its own currency circulated internationally, provided the domestic circulation is controlled for. When the total supply is fixed, however, a resulting currency shortage may reduce the national welfare.
关键词: Money as a medium of exchange, Random matching games, Multiple currencies, Best response dynamics, and Evolution of international currency 学科: F31 - Foreign Exchange, D51 - Exchange and Production Economies, E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems, and C78 - Bargaining Theory; Matching Theory
Creator: Gertler, Mark and Rogoff, Kenneth S. Series: International perspectives on debt, growth, and business cycles Abstract:
Across developing countries, capital market inefficiencies tend to decrease and external borrowing tends to sharply increase as national wealth rises. We construct a simple model of intertemporal trade under asymmetric information which provides a coherent explanation of both these phenomenon, without appealing to imperfect capital mobility. The model can be applied to a number of policy issues in LDC lending, including the debt overhang problem, and the impact of government guarantees of private debt to foreign creditors. In the two-country general equilibrium version of the model, an increase in wealth in the rich country can induce a decline in investment in the poor country via a "siphoning effect". Finally, we present some new empirical evidence regarding the link between LDC borrowing and per capita income.
学科: F43 - Economic Growth of Open Economies and O11 - Macroeconomic Analyses of Economic Development
Creator: Cole, Harold Linh, 1957-, Dow, James, 1961-, and English, William B. (William Berkeley), 1960- Series: International perspectives on debt, growth, and business cycles Abstract:
We consider a model of international sovereign debt where repayment is enforced because defaulting nations lose their reputation and consequently, are excluded from international capital markets. Underlying the analysis of reputation is the hypothesis that borrowing countries have different, unobservable, attitudes towards the future. Some regimes are relatively myopic, while others are willing to make sacrifices to preserve their access to debt markets. Nations' preferences, while unobservable, are not fixed but evolve over time according to a Markov process. We make two main points. First we argue that in models of sovereign debt the length of the punishment interval that follows a default should be based on economic factors rather than being chosen arbitrarily. In our model, the length of the most natural punishment interval depends primarily on the preference parameters. Second, we point out that there is a more direct way for governments to regain their reputation. By offering to partially repay loans in default, a government can signal its reliability. This type of signaling can cause punishment interval equilibria to break down. We examine the historical record on lending resumption to argue that in almost all cases, some kind of partial repayment was made.
学科: H63 - National budget, deficit, and debt - Debt ; Debt management and F34 - International finance - International lending and debt problems
Creator: Lacker, Jeffrey Malcolm and Schreft, Stacey Lee Series: Monetary theory and financial intermediation Abstract:
We describe a stochastic economic environment in which the mix of money and trade credit used as means of payment is endogenous. The economy has an infinite horizon, spatial separation and a credit-related transaction cost, but no capital. We find that the equilibrium prices of arbitrary contingent claims to future currency differ from those from one-good cash-in-advance models. This anomaly is directly related to the endogeneity of the mix of media of exchange used. In particular, nominal interest rates affect the risk-free real rate of return. The model also has implications for some long-standing issues in monetary policy and for time series analysis using money and trade credit.
学科: E42 - Money and interest rates - Monetary systems ; Standards ; Regimes ; Government and the monetary system ; Payment systems and G12 - General financial markets - Asset pricing ; Trading volume ; Bond interest rates