A market for used capital goods, or financial instruments that represent the ownership of the used capital goods, induces inflation taxes on wealth and on the nominal income flows they provide. This paper explicitly introduces trading in either used capital goods or financial instruments into...

(Copyright: Elsevier)

A framework for examining the process of financial market development is proposed. The framework is anchored in studying the incentives facing the key players in financial markets - borrowers, lenders, liquidity providers, and regulators - whose actions determine whether and how markets develop....