This paper presents a model in which investors, acting in self-interest, force interest rates to the levels desired by the monetary authority. If interest rates move out of line with those required by the monetary authority, a statement (an open mouth operation) is all that is needed to restore...

We explore the problem of network interconnection in local telecommunications. We develop a model with a competitive business sector and a regulated residential sector. The model is used to analyze the celebrated New Zealand antitrust case between Clear and Telecom. We discuss implications of...