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Stabilizing the economy: Market design and general equilibrium

Goeree, Jacob K.; Lindsay, Luke - 2012

Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at … the competitive equilibrium they oscillate without converging. Anderson et al. (Journal of Economic Theory, 2004) report … convergence. We replicate their experiments and confirm that tatonnement theory predicts the direction of price changes remarkably …

Persistent link: https://www.econbiz.de/10010316891

The redistributive effects of monetary policy

Ledoit, Olivier - 2011

We introduce a model of the economy as a social network. Two agents are linked to the extent that they transact with each other. This generates well-defined topological notions of location, neighborhood and closeness. We investigate the implications of our model for monetary economics. When a...

Persistent link: https://www.econbiz.de/10010316933

Non-existence of recursive equilibria on compact state spaces when markets are incomplete

Krebs, Tom - 2002

This paper analyzes one-good exchange economies with two infinitely-lived agents and incomplete markets. It is shown that there are no recursive (Markov) equilibria for which borrowing (debt) constraints never bind if the state space of exogenous and endogenous variables is a compact subset of...

Persistent link: https://www.econbiz.de/10010318900

Decentralized trade, Random utility and the evolution of social welfare

Kandori, Michihiro; Serrano, Robert; Volij, Oscar - 2004

We study decentralized trade processes in general exchange economies and house allocation problems with and without money. Such processes are subject to persistent random shocks stemming from agents’ maximization of random utility. By imposing structure on the utility noise term —logit...

Persistent link: https://www.econbiz.de/10010318996

Optimal disclosure policy and undue diligence

Andolfatto, David; Berentsen, Aleksander; Waller, … - 2011

While both public and private financial agencies supply asset markets with large quantities of information, they do not necessarily disclose all asset-related information to the general public. This observation leads us to ask what principles might govern the optimal disclosure policy for an...

Persistent link: https://www.econbiz.de/10010316837

Money

Wray, L. Randall - 2010

possible. These three propositions are used to build a theory of money that is linked to common themes in the heterodox …'s approach, which relies on accounting identities; the K distribution theory of Keynes, Michal Kalecki, Nicholas Kaldor, and …

Persistent link: https://www.econbiz.de/10010286493

The Macroeconomic Loss Function: A Critical Note

Mayer, Thomas - 2002

The standard loss function gives the same weight to positive and negative deviations from the output and inflation targets. This short note criticizes this symmetry assumption. If the period covered is long enough output growth in excess of the target, and often also inflation rates that are...

Persistent link: https://www.econbiz.de/10010318590

Equity, envy and efficiency under asymmetric information

de Clippel, Geoffroy - 2004

The set of fair (i.e. envy free and efficient) allocation rules may be empty in wellbehaved pure exchange economies if the agents are asymmetrically informed at the time of contracting. In addition, there may exist efficient allocation rules such that every agent envies another.

Persistent link: https://www.econbiz.de/10010318853

Mistakes in cooperation: The stochastic stability of Edgeworth's recontracting

Serrano, Roberto; Volij, Oscar - 2003

In an exchange economyw ith a finite number of indivisible goods, we analyze a dynamic trading process of coalitional recontracting where agents may make mistakes with small probability. We show first that the recurrent classes of the unperturbed (mistakefree) process consist of (i) all core...

Persistent link: https://www.econbiz.de/10010318892

The type-agent core for exchange economies with asymmetric information

de Clippel, Geoffroy - 2004

The type-agent core is a new solution concept for exchange economies with asymmetric information. It coincides with the set of equilibrium outcomes of a simple competitive screening game. Uninformed intermediaries help the agents to cooperate in an attempt to make some profit. The paper extends...

Persistent link: https://www.econbiz.de/10010318975