the effects of land policy quantity as well as quality is important most studies of land policy in the abstract and when applied to a country and to comparisons between countries use a theoretical framework which is derived ultimately from ricardo s land price theory this is used to predict the effects and the incidence of the costs and benefits which result from applying land policy instruments this article begins by comparing land policy in israel and the netherlands in that way both countries have a highly sophisticated and integrated set of land policy instruments however some very important differences between the effects of applying those instruments in the two countries cannot be explained within that framework in particular in the netherlands the development value of land is low and development gains small in stark contrast with israel a supplementary framework is needed and this is given by the stock adjustment model applied to housing with this the difference between the two countries can be explained as being the result of differences in the way

currency and credit in a private information economy in an environment with private information spatial separation and limited communication a currency like object and more standard named credits can be distinguished the credit objects can be used among agents in an enduring relationship that is among agents with known trading histories whereas the currency like object must be used among relative strangers in this environment collectively determined pareto optimal rules make the level of the currency like object and the mix of currency to named credits responsive to individual needs and to economywide states total indebtedness is determined by the number of lenders that is by preference or demand shocks and the mix of currency to credits is determined by transaction patterns among the agents

reflections on the nature and policy implications of planning restrictions on housing supply discussion of planning policy planning practice and housing supply by kate barker planning is about other things as well but it is fundamentally an economic activity it allocates a scarce resource but independently of prices or any market information in analysing the effects this allocative mechanism has on housing supply or indeed the supply of buildings for any given use we need to think carefully about what exactly it is that planning allocates and whether in its operation it creates a constraint on the supply of what it is allocating in the british case our planning system does not operate on the supply of housing directly but indirectly via the constraint imposed on land supply given the income elasticity of demand for space this has policy implications perhaps even more serious than is acknowledged by barker

anonymous markets and monetary trading abstract we study infinite horizon monetary economies characterized by trading frictions that originate from random pairwise meetings and commitment and enforcement limitations we prove that introducing occasional trade in centralized markets opens the door to an informal enforcement scheme that sustains a non monetary efficient allocation all is required is that trading partners be patient and their actions be observable we then present a matching environment in which trade may occur in large markets and yet agents trading paths cross at most once this allows the construction of models in which infinitely lived agents trade in competitive markets where money plays an essential role

are any growth theories robust this article investigates the strength of empirical evidence for various growth theories when there is model uncertainty with respect to the correct growth model using model averaging methods we find little evidence that so called fundamental growth theories play an important role in explaining aggregate growth in contrast we find strong evidence for macroeconomic policy effects and a role for unexplained regional heterogeneity as well as some evidence of parameter heterogeneity in the aggregate production function we conclude that the ability of cross country growth regressions to adjudicate the relative importance of alternative growth theories is limited despite the vast amount of empirical research generated by new growth theories there is remarkably little consensus on which mechanisms are most salient in explaining cross country differences this article is designed to provide some evidence on this question by examining the robustness of empirical support for different growth the ories as determinants of both aggregate growth and its underlying components total factor productivity tfp growth and physical and human capital accumulation one reason for the lack of empirical consensus on growth determinants is that the main statistical tool in empirical studies cross country growth regressions provides very different answers depending on how the regression is specified which for this context typically amounts to the choice of control variables individual papers typically employ regressions that include modest subsets of the body of regressors that have been pro posed in the literature as a whole others employ a kitchen sink approach to evaluate the relative evidentiary support of competing growth theories in such an exercise a large number of variables are included in a regression and those variables that prove to be significant are then declared to be the important determinants of growth while the others are dismissed as unimportant rodrik et al 2002 sachs 2003

the impact of land use planning and tax subsidies on the supply and price of housing in britain this article presents new empirical estimates of the impact of two types of policy intervention tax subsidies and land use planning on the housing market in britain the estimates are derived from a set of models representing the demand and supply sides of the market for the new private housebuilding which include an explicit land supply element the models are fitted to cross sectional data at the inter urban local authority level and then employed in medium period simulations of alternative policies modelling at this level enables estimates to be made of the extent of variation between local markets in the elasticity of supply and also in the impacts of policy measures including the capitalisation of tax subsidies

equilibrium policy in an overlapping generations economy abstract this paper offers a mechanism for reducing the number of stationary equilibria that arise in a simple two period lived overlapping generations economy since each equilibrium is associated with a different combination of monetary and fiscal policies i assume that at each date the agent in his second period of life determines how that period s monetary and fiscal instruments will be set i show that the set of stationary equilibria where this occurs is a proper and nonempty subset of the set of stationary competitive equilibria and that at least one such equilibrium is a pareto optimum

macroeconomic features of the french revolution this paper describes aspects of the french revolution from the perspective of theories about money and government budget constraints we describe how unpleasant fiscal arithmetic gripped the old regime how the estates general responded to reorganize france s fiscal affairs and how fiscal exigencies impelled the revolution into a procession of monetary experiments ending in hyper inflation

monetary fiscal and reserve requirement policy in a simple monetary growth model the authors consider an otherwise conventional monetary growth model in which spatial separation and limited communication create a transactions role for currency and stochastic relocation gives rise to financial intermediaries in this framework they consider how changes in fiscal and monetary policy and in reserve requirements affect inflation capital formation and nominal interest rates there is also considerable scope for multiple equilibria the authors show how reserve requirements that never bind along actual equilibrium paths can play an important role in avoiding undesirable equilibria finally they demonstrate that changes in apparently nonbinding reserve requirements can have significant real effects coauthors are mark g guzman elisabeth huybens and bruce d smith copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

rough and lonely road to prosperity a reexamination of the sources of growth in africa using bayesian model averaging this paper takes a fresh look at africa s growth experience by using the bayesian model averaging bma methodology bma enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain africa s growth experience posterior coefficient estimates reveal that key engines of growth in africa are substantially different from those in the rest of the world more precisely it is shown that mining primary exports and initial primary education exerted differential effect on african growth these results are examined in relation to the existing literature copyright 2008 john wiley sons ltd

social rented housing valuable asset or unsustainable burden the netherlands has maintained a high degree of intervention in the housing market through the 1980s it also has a very large social rented sector which comprises 40 per cent of the total housing

search evolution and money abstract this paper describes a search theoretic model that can be used to determine which objects serve as media of exchange or money existing versions of the model are generalized to allow arbitrary distributions of agents who specialize in different consumption production activities i characterize the way the numbers of consumers and producers of the various goods help determine which goods serve as money the distribution is then endogenized so that agents can choose their type this generates a unique equilibrium outcome ideas from evolutionary dynamics are employed as a way to interpret the model and to compute equilibria

fiat exchange in finite economies the state of the art of rendering fiat money valuable is either to impose a boundary condition or to make the boundary condition unimportant through an infinite sequence of markets so as to circumvent backward induction we show fiat exchange may nevertheless arise in finite economies if agents have incomplete information about their relative position in the trade cycle or when the barter and autarky equilibria of the one shot trading round support a monetary equilibrium with repeated trades

land conversion at the urban fringe a comparative study of japan britain and the netherlands in the 1980s the multiplier between land values for agricultural and urban uses was found to run at 50 200 times or even higher in the areas surrounding expanding cities in japan and britain co

rabbit hutches on postage stamps planning development and political economy the supply of land for housing has been restricted by planning controls the prices of land and of houses have risen in consequence as a result land has been used with increasing intensity with infill town cramming and smaller houses on less land rabbit hutches on postage stamps a destruction of the urban environment of the many to preserve a rural environment for a few why is the supply of land restricted firstly it is suggested because the british misapprehend the degree of urbanisation in their own country secondly because rural and farming interests ensure that the planning system operates in their favour and thirdly and most importantly because the planning process is tilted in favour of the existing residents of an area who seek to preserve their environment by resisting intruders a number of suggestions are made to resolve the situation by increasing the supply of land or reducing the demand for land

allocative effects of financial assets and the long run neutrality of money when markets are incomplete abstract we analyze the allocative role of money as a numeraire in an intertemporal general equilibrium model with incomplete financial markets and nominal financial instruments it is shown that regardless of their return specification nominal assets in net supply increase the consumption risk and trigger an endogenous monetary process which diminishes the influence of these assets on the equilibrium allocation through time the nonneutrality of money claimed in the recent literature is a temporary phenomenon only asymptotically the traditional neutrality theorems are valid

coexistence of money and interest bearing securities abstract a random matching model with money is used to study the nominal yield on small denomination bearer safe discount securities issued by the government there is always one steady state with matured securities circulating at par and for some parameters another with them circulating at a discount in the former a necessary and sufficient condition for a positive nominal yield on not yet matured securities is exogenous discriminatory treatment of them by the government in the latter the post maturity discount on securities induces a deeper pre maturity discount even without such discriminatory treatment

efficiency improvement from restricting the liquidity of nominal bonds abstract in a monetary search model with nominal bonds agents face matching taste shocks but they cannot insure borrow or trade against such shocks a government imposes a legal restriction that prohibits bonds from being used to buy a subset of goods i show that this legal restriction can increase the society s welfare in contrast to the literature this efficiency role persists in the steady state and even when the households cannot trade assets after receiving the shocks moreover it can exist when the friedman rule is available and when the restriction is only obeyed by government agents

assets general equilibrium and the neutrality of money when government liabilities including money are held in private portfolios only as stores of value and do not provide additional services such as liquidity real variables are not affected by changes in the money supply due to the government s trading in real assets open market operations this neutrality of monetary policy fails if the government either trades in nominal assets or it distributes subsidies and levies taxes the ability of monetary policy to affect real variables is an important issue and has been the subject of numerous theoretical and empirical studies the most useful theoretical framework within which to address the problem is a model of asset markets where the demand for money or other government liabilities is determined by rational portfolio choice tobin 1958 these assets may of course provide additional services such as transactions and liquidity we assume here however that these services do not exist the standard argument for the effectiveness of monetary policy goes as follows changes in the supply of money affect the price level and hence the distribution of returns to money as an asset as individuals realign their portfolios and prices adjust to maintain market clearing the equilibrium holdings of physical assets change in this case money is not neutral we shall argue however that as long as changes in the supply of money are effected through the government s trading in real assets this argument is in general not valid it is well known that the effectiveness of monetary policy depends on the method of injection of new money into the economy two procedures are used by the government to effect changes in the supply of money it either trades in assets nominal or real open market operations or it distributes subsidies and levies taxes we show here that open market operations in real assets capital or indexed bonds have no effects on real variables in a general equilibrium model with market clearing the argument which can also be applied to the management of the public debt is presented in a most general framework in the next section it does not depend on the existence of a complete system of contingent securities or on an operative bequest motive furthermore it is compatible with incomplete and differential information the result is similar to the modigliani miller theorem in corporate finance that an argument along these lines can be employed to demonstrate the irrelevance of open

legal restrictions sunspots and cycles abstract an economy in which legal restrictions prevent private agents from issuing close substitutes for money is examined specifically in a model with borrowing and lending agents are prevented from acquiring privately issued liabilities in amounts smaller than some minimum dollar denomination an economy is then constructed which has no sunspot equilibria absent such a restriction in the presence of the restriction however conditions sufficient to rule out equilibrium 2 cycles also imply the existence of stationary sunspot equilibria this is the case even though all agents have savings functions that are non decreasing in relevant rates of return

can we improve the structure of financial systems 1993 the main theme of this paper is that several of the characteristics of our present western monetary and banking systems have been crucially dependent on the particular temporal process of historical development and are not an essential feature of more fundamental preferences or technological conditions they exist in part because we take them for granted it is the purpose of this paper to examine what might change in both theory and practice if some of these inessential characteristics were to be changed

a clower constraint model of unbacked money abstract the stylized monetary facts 1 money growth causes inflation 2 inflation is bad 3 money demand depends upon the nominal interest rate 4 the real interest rate equals a parametrically fixed rate of time preference and 5 investment depends upon the real interest rate are produced in a grandmont younes modified clower constraint model of money inflation is distorting but is no one s intertemporal rate of substitution inflation discourages trade but not investment as a by product the friedman hypothesis that the optimal deflation equals the rate of time preference is confirmed in the model

comments on jointness of growth determinants we consider the measures of jointness proposed by doppelhofer and weeks 2009 and strachan 2009 in the context of variable selection using the general criteria suggested in ley and steel 2007 we identify some shortcomings of these measures which are illustrated with empirically relevant example cases we argue that careful examination of the properties of any jointness measure is critical before using it to inform decisions and favour the use of the measures proposed in ley and steel 2007 copyright c 2009 john wiley sons ltd

providing cheap land for social housing breaching the state aid regulations of the single european market tasan kok t groetelaers d a haffner m e a van der heijden h m h and korthals altes w k providing cheap land for social housing breaching the state aid regulations of the single european market regional studies european union member states are not permitted to provide aid that will distort competition by favouring certain undertakings or the production of certain goods which may then undermine trading in the european market this prohibition also affects government authorities that are willing to provide cheap land for social and affordable housing this paper reviews the ways in which land is provided for social housing in the netherlands and explores possibilities for reshaping current practices to make them compatible with the regime of the single european market tasan kok t groetelaers d a haffner m e a van der heijden h m h and korthals altes w k

inventories and money holdings in a search economy the authors analyze a continuous time model with a walrasian labor market and a random search retail market with prices set on a take it or leave it basis the equilibrium distribution of money holdings is the asymptotic steady state of this stochastic process there is a unique uniform price steady state equilibrium the faster the search process the higher the absolute price wage and real wage the instantaneous effect of an equal per capita infusion of money is to raise the price wage real wage and transactions rate the immediate post infusion price and wage can overshoot their new asymptotic values copyright 1990 by the econometric society

a theory of public debt management with unobservable demand the literature on debt management has devoted little attention to the practice of floating debt using subscription issues i e at a fixed price and quantity even if this practice is rather common in many countries as an alternative to placement techniques that involve competitive bidding the focus of this paper is on this marketing strategy for a public debt manager facing uncertain market conditions in particular we consider a framework where government bonds are the only investment opportunity the debt manager therefore holds monopoly power over the market for financial assets and solves his profitmaximisation problem by setting the price of the bonds in the face of an unobservable demand function intertemporal economic decisions under uncertainty can be modelled as multiperiod control problems when the parameters of the true model are unknown as in our case a tradeoff typically arises between current profits and the value of information which can be extracted through price experimentation in an active learning framework in particular agents are assumed to use such information in order to update their stock of knowledge according to bayes rule 2 several applications of the modelling strategy discussed above have been explored for example an active learning setting can fit the description of the problem of a consumer facing the decision to buy a good with uncertain quality alternatively the same setting can be employed in order to investigate the behaviour of a monopolistic firm facing an unknown demand for its product in this paper we model the macroeconomic policy oriented issue previously illustrated as a stochastic multiperiod control problem with learning we therefore assume that debt policy and in particular the debt manager s pricing strategy is the result of the intertemporal maximisation of the government s objective function subject to a budget constraint in a context where information is optimally employed in the decision process in addition the

comment on jointness of growth determinants by gernot doppelhofer and melvyn weeks doppelhofer and weeks 2009 present a statistic designed to indicate the probability that pairs of regressors appear together or individually in a bayesian model averaged linear regression this comment presents an alternative measure that is designed to overcome some of the limitations of doppelhofer and weeks statistic copyright 2009 john wiley sons ltd

fiat money and quality uncertainty the paper studies the role of money as a medium of exchange when barter trade is restricted not only by the double coincidence of wants requirement but also by private information about the quality of commodities for this purpose the model of kiyotaki and wright 1989 is extended to include commodities of both high and low quality it is shown that despite being intrinsically useless fiat money may have value in trade because it is of uniform quality moreover the introduction of a sufficiently small amount of fiat money proves to be welfare increasing

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

a property rights approach to externality problems planning based on compensation rules most european countries have implemented some kind of land use planning based on exclusionary zoning principles to achieve spatial goals this paper argues that to reduce externality problems regulatory planning is not always the best planning solution therefore an alternative planning approach which makes use of compensation rules is suggested in this paper this compensatory planning approach is based on property rights theory and refers to recent applications of this theory to planning practice to illustrate the usefulness of such an approach it is applied to the planning of out of town retail development in the netherlands the paper aims to demonstrate how deficiencies in the property rights regime can be repaired to deal with externality problems achieving a more socially acceptable outcome of out of town retail development the paper concludes with a discussion of the value of spontaneous order solutions for planning practice by introducing four pragmatic rules on how to choose between di

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

the evolution of monetary equilibrium abstract the hahn problem is that even if a monetary equilibrium with valued fiat money exists in general equilibrium a nonmonetary equilibrium with a zero price on money generally also exists why should we expect the former over the latter here i consider the preferences that will survive repeated trading in an exchange economy where agents compete in biological fitness with unobservable preferences and positive assortativity in matching evolutionarily stable preferences implement the competitive equilibrium that maximizes the sum of agents fitnesses in a standard bewley townsend model this implies selection of the monetary over the nonmonetary equilibrium and also implies the survival of agents with money in the utility function trust in fiat money is only a recent development and even today such faith is hardly universal cass and shell 1980

the challenge of monetary theory departing from custom i want to address a problem that needs to be solved rather than one that has been solved i do not have much to contribute to its solution but i believe that the problem is important and want to focus attention on it in general terms the problem is to find appropriate conceptual foundations for monetary economics i believe that we do not as yet have a suitable theoretical framework for studying the functioning of a monetary system the main obstacle to the development of such a framework is our habit of thinking in terms of frictionless organized i e walrasian markets the problem is partly a problem of language the central concepts of economics demand supply and price are concepts that presuppose a system of centralized walrasian markets we are used to thinking in terms of these concepts and we tend to apply them rather automatically to the market for money frequently without realizing that the market for money must be a rather non walrasian market if indeed it can be called a market at all more or less all the models of monetary economics that are being used in practice proceed in this way using artifical adaptations of the walrasian centralized markets model to accommodate money without actually giving an account of what the role of money in the economy is the problem is one of pure economic theory however it bears on many important questions of applied economics and economic policy to study the relation between money income and prices we need a framework which gives a satisfactory account of the relation between the monetary system and the price mechanism to study the effects of central bank open market

international monetary trade and the law of one price abstract we endogenize circulation of currencies and price formation in a decentralized trading environment with two countries and two currencies in equilibrium sellers of homogeneous goods may post prices in the national or also in the foreign currency given unobservable buyers valuations we prove that under different monetary regimes the absence of well integrated international goods markets doesn t necessarily imply a violation of the law of one price we also illustrate the behavior of prices across regimes characterized by different degrees of monetary integration

the non monotonic relationship between seigniorage and inequality we present an analysis of how political factors may come into play in the equilibrium determination of inflation we employ a standard overlapping generations model with heterogenous young age endowments and a government that funds an exogenous spending via a combination of non distortionary income taxes and the inflation tax agents have access to two stores of value fiat money and an inflation shielded yet costly asset the model predicts that the relationship between elected reliance on the inflation tax for revenue and income inequality may be non monotonic we find robust empirical backing for this hypothesis from a cross section of countries jel classification e5 p16

a price discrimination analysis of monetary policy monetary policy is analysed within a model that appeals to legal restrictions on private intermediation to explain the coexistence of currency and interest bearing default free bonds the interaction between such legal restrictions and monetary policy is illustrated in a version of the overlapping generations model the model shows that legal restrictions and the use of both currency and bonds permit the government to levy a nonlinear inflation tax and that such a tax may be better in terms of the pareto criterion than a linear inflation tax

endogenous market formation and monetary trade an experiment the theory of money assumes decentralized bilateral exchange and excludes centralized multilateral exchange however endogenizing the exchange process is critical for understanding the conditions that support the use of money we develop a traveling game to study the emergence of decentralized and centralized exchange theoretically and experimentally players located on separate islands can either trade locally or pay a cost to trade elsewhere so decentralized and centralized markets can both emerge in equilibrium the former minimize trade costs through monetary exchange the latter maximizes overall surplus through nonmonetary exchange monetary trade emerges when coordination is problematic whereas centralized trade emerges otherwise this shows that to understand the emergence of money it is important to amend standard theory such that the market structure is endogenized

a theory of land prices when land is supplied publicly the case of the netherlands most attempts to explain land prices assume free competition between suppliers and demanders of land if there are constraints on this competition e g land use planning this is added as a modification to the theory when however the supply of building land is in the hands of public agencies which determine the volume and price of supply specified by land use and location a different theoretical approach is needed in this situation certain economic principles apply which determine the maximum and minimum prices at which land will be bought for development and at which serviced building land will be supplied for development however both the limits of this range and the actual land prices within it will depend on political choices made by the public agencies in the netherlands municipalities dominate the supply of land for development and redevelopment information about the way dutch municipalities make the political choices and about the actual land prices there suggests they make the politic

unveiling covariate inclusion structures in economic growth regressions using latent class analysis we propose the use of latent class analysis methods to analyze the covariate inclusion patterns across specifications resulting from bayesian model averaging exercises using dirichlet process clustering we are able to identify and describe dependency structures among variables in terms of inclusion in the specifications that compose the model space we apply the method to two datasets of potential determinants of economic growth clustering the posterior covariate inclusion structure of the model space formed by linear regression models reveals interesting patterns of complementarity and substitutability across economic growth determinants

barter in the us economy a macroeconomic analysis in this paper a statistical model is developed to examine the determinants of the growing level of barter transactions in the us although a barter system is believed to be pareto inferior to a money system recent statistics of the estimated level of barter transactions in the us show a rapidly growing interest by large corporations as well as individuals in this type of trade the primary obstacle in empirical research in this area is the difficulty of measuring the size of barter transactions here data from barter exchange organizations are used to test the significance of several variables the ordinary least squares and cointegration and error correction models are employed as two alternative empirical techniques to analyse the data the results support the counter cyclical arguments as well as the inflation factor however the notion of tax evasion as a motive in organized barter receives only a partial support

markets do not select for a liquidity preference as behavior towards risk tobin 1958 has argued that in the face of potential capital losses on bonds it is reasonable to hold cash as a means to transfer wealth over time it is shown that this assertion cannot be sustained taking into account the evolution of wealth of cash holders versus non cash holders cash holders will be driven out of the market in the long run by traders who only use a risky long lived asset to transfer wealth moreover bond holders do not survive in the presence of only stock holders even if the payofi of bonds dominates the dividend of stock

an empirical approach to urban land monopoly a case study of the city of barranquilla colombia in this paper we focus on the role and economic effect of land ownership and land monopoly in emerging urban environments land monopoly in conventional economics is a theoretical impossibility

money and interest in a cash in advance economy the authors analyze an aggregative general equilibrium model in which the use of money is motivated by a cash in advance constraint applied to purchases of a subset of consumption goods the system is subject to both real and monetary shocks which are economy wide and observed by all they develop methods for verifying the existence of characterizing and explicitly calculating equilibria copyright 1987 by the econometric society

public debt in economies with heterogeneous agents abstract we study public debt in competitive equilibria in which a government chooses transfers and taxes optimally and in addition decides how thoroughly to enforce debt contracts if the government enforces perfectly asset inequality is determined in an optimum competitive equilibrium but the level of government debt is not welfare increases if private debt contracts are not enforced borrowing frictions let the government gather monopoly rents that come from issuing public debt without facing competing private borrowers regardless of whether the government chooses to enforce private debt contracts the level of initial government debt does not affect an optimal allocation

debt enforcement and the value of money this paper presents a framework in which fiat money has value in equilibrium even though a risk free higher return asset can be equally used as a medium of exchange in a limited commitment environment agents may prefer to borrow a low return asset because that results in a larger borrowing capacity thus a monetary equilibrium in which money is dominated in rate of return exists

a note on the societal benefits of illiquid bonds kocherlakota 2003 provides an example of a monetary economy where efficiency is enhanced with the introduction of a nominally risk free bond that is specifically designed to be illiquid the societal benefit of an illiquid bond in his example however is transitory and he does not characterize an optimal policy i use an analytically tractable framework to characterize an optimal intervention and to show that the purported benefits of an illiquid bond market persist in a steady state kocherlakota 2003 a donne un exemple d une economie monetaire ou l efficacite est accrue par l introduction d une debenture nominalement sans risque destinee specifiquement aetre illiquide l avantage societal d une debenture illiquide dans son exemple est cependant transitoire et l auteur ne definit pas une politique optimale on utilise un cadre de reference analytiquement soluble pour caracteriser une intervention optimale et pour montrer que les avantages attendus d une debenture illiquide persistent en regime permanent

government borrowing using bonds with randomly determined returns welfare improving randomization in the context of deficit finance abstract we study the problem of a government that wishes to share optimally the burden of deficit finance among agents with differential access to investment opportunities in the presence of private information it is pareto efficient for the government to borrow in a way that amounts to non linear taxation and it must treat agents with access to the best investment opportunities preferentially to keep them in the bond market in addition with private information about access to assets it is often desirable to randomize extraneously the return on the highest yielding government liabilities the optimal government policy is shown to accord well with historical observations and provides insight into why explicit randomization is not often observed in private contracts

moneyspots extraneous attributes and the coexistence of money and interest bearing nominal bonds it is folklore among monetary theorists that under laissez faire without ad hoc assumptions that favor money over bonds there do not exist equilibria in which government issued fiat money coexists with nominal default free interest bearing government bonds with similar physical characteristics this proposition is the basis for the strongest version of the rate of return dominance puzzle in this paper i show that if as has been the case throughout monetary history the physical object used as fiat money is heterogeneous in an extraneous attribute then there exist equilibria in which money coexists with interest bearing bonds

jointness of growth determinants reply to comments by rodney strachan eduardo ley and mark f j steel this comment contrasts the jointness statistics proposed by doppelhofer and weeks 2009 with alternatives proposed by strachan 2009 and ley and steel 2007 in contrast to the alternatives our jointness statistic constitutes a formal test for dependence over the joint posterior distribution the essential difference between our proposed measure and the alternatives is that our jointness measures uses the entire joint posterior distribution we discuss differences in jointness as well as inclusion and exclusion margins of the joint posterior distribution and the impact on economic significance using the numerical examples given by strachan 2009 and ley and steel 2009 copyright 2009 john wiley sons ltd

the strategic implications for the randstad of the dutch property system the aim of this paper is to decide how well the dutch are served by their property system and whether it is organisation ally and functionally suited to advancing the competitive position of the randstad cities within a unified europe in the first part of the paper some of the distinctive features of the dutch property system are highlighted by drawing comparison with trends and outcomes found in the british and australian housing and office submarkets pricing policy in the netherlands is outlined followed by a consideration of some key outcomes including the relative stability of property prices modest inter regional price differentials public benefits of a regulated land supply occasional breakdown of coordination indifference towards development gains then the property system is discussed in the context of internationalisation subsidies and coordinated property development within the randstad the concluding assessment suggests that at present the dutch have a de facto as much as a strate

price discriminating monetary policy a nonuniform pricing approach abstract this paper establishes that a version of the bryant and wallace 1984 price discrimination analysis of monetary policy can be viewed as a special case of the spence 1977 nonuniform pricing model to this end a general equilibrium model is constructed with heterogeneous agents and a government that faces an informational restriction the government must finance an exogenously determined stationary deficit by issuing bonds or currency with quantity dependent prices in addition to generalizing the bryant and wallace model the analysis accomplishes the following i the informational restriction helps justify the ruling out of lumpsum taxation a crucial assumption of the bryant and wallace model and ii the analysis provides insight into nonuniform pricing in a simple general equilibrium model with heterogeneous agents

inflation and welfare in the steady state this is a paper on expected inflation and welfare in steady state equilibrium the demand for money is an inventory demand with an endogenous payment period the clower constraint is not imposed higher inflation reduces welfare by reducing consumption as people devote more of their real income to maintaining lower average money holdings high inflation does not necessarily promote an increase in the capital stock the mundell tobin effect is absent the policy conclusion is standard deflate at the rate of time preference because capital is held socially optimal consumption falls short of its golden rule level if inside money is allowed it drives out fiat money and welfare is again at a maximum

jointness of growth determinants this paper introduces a new measure of dependence or jointness among explanatory variables jointness is based on the joint posterior distribution of variables over the model space thereby taking model uncertainty into account by looking beyond marginal measures of variable importance jointness reveals generally unknown forms of dependence positive jointness implies that regressors are complements representing distinct but mutually reinforcing effects negative jointness implies that explanatory variables are substitutes and capture similar underlying effects in a cross country dataset we show that jointness among 67 determinants of growth is important affecting inference and informing economic policy copyright 2009 john wiley sons ltd

liquidity a new monetarist perspective this essay surveys the new monetarist approach to liquidity work in this literature strives for empirical and policy relevance plus rigorous foundations questions include what is liquidity is money essential in achieving desirable outcomes which objects can or should serve in this capacity when can asset prices differ from fundamentals what are the functions of commitment and collateral in credit markets how does money interact with credit and intermediation what can and should monetary policy do the research summarized emphasizes the micro structure of frictional transactions and studies how institutions like monetary exchange credit arrangements or intermediation facilitate the exchange process

when should bank regulation favor the wealthy many economies restrict and in some cases severely restrict the access of poor agents to savings opportunities this paper suggests conditions under which there are good reasons to do so from the perspective of all agents including the poor journal of economic literature classification numbers e44 e50

a simple general equilibrium version of the baumol tobin model this paper presents a simple general equilibrium model that includes optimizing choices of the frequency of trips to the bank the model is used to analyze the effect of inflation on the capital stock the interest elasticity of money demand the optimum quantity of money and the welfare costs of inflationary finance

outside versus inside bonds a modigliani miller type result for liquidity constrained economies when agents are liquidity constrained two options exist sell assets or borrow we compare the allocations arising in two economies in one agents can sell government outside bonds and in the other they can borrow by issuing inside bonds all transactions are voluntary implying no taxation or forced redemption of private debt we show that any allocation in the economy with inside bonds can be replicated in the economy with outside bonds but that the converse is not true however the optimal policy in each economy makes the allocations equivalent

interest rates in a credit constrained economy when households face credit constraints in an economy with inside as well as outside money stationary equilibrium real interest rates are below the household rate of time preference they also depend significantly upon household risk aversion the demand for inside versus outside money bank costs bank reserves inflation and the marginal productivity of capital and capital depreciation rates in addition changes in financial variables affect per capita capital and output to a greater extent when households are credit constrained copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

commitment and the adoption of a common currency in contrast to mundell s inquiry on the optimality of currency areas this article aims to understand under what circumstances a pareto dominant monetary union will be established using a multicountry overlapping generations model we highlight gains from monetary union arising from reduced transactions costs and lower inflation despite these gains countries acting independently will impose barriers to exchange through local currency restrictions thereby creating transactions costs and providing an incentive for inflation therefore the gains from monetary union are most likely to be lost without collective effort