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Author: Ayushi Bajaj Publisher: ISBN: 9780355307283 Category : Languages : en Pages : 115
Book Description
Decentralized markets where assets are useful as medium of exchange are also usually subject to private information. In the first chapter, I analyze how adverse selection affects liquidity and prices in such markets by studying the Shi (1995) and Trejos and Wright (1995) model with Lucas trees under adverse selection. While most studies focus on either pooling or separating equilibrium, I adapt the undefeated equilibrium refinement to make the selection based on fundamentals. Under pooling, the high-quality asset accepts a pooled price, and under separating is willing to signal quality through retention. A negative shock to the quality or quantity of lemons implies a switch in regime from no-information (pooling) to information revelation (separating) which leads to a discontinuous fall in aggregate welfare. In the second chapter I apply insights from the first chapter to help account for the debasement puzzle by interpreting Lucas trees as commodity money of different weights. Debasements constitute a puzzle under standard price theory because people voluntarily exchanged heavy coins for lighter ones; the difference being kept as seigniorage. To resolve this, I adopt Velde, Weber and Wright (1999) featuring a decentralised market with private information on indivisible coins. To disentangle indivisibility from imperfect recognizability, I use a proxy for divisibility by allowing lotteries on coins in trade. Indivisibility accounts for debasement if agents need a medium of exchange for low-value goods, for which heavy coins would not be traded. And, even a small degree of imperfect recognizability provides incentives for debasement due to adverse selection. Finally, in the third chapter I model household's portfolio choice with an endogenous supply of assets under uncertainty to analyze its effect on real interest rates and unemployment. Asset returns typically reflect a risk and liquidity premium, the size of which depends on the state of the economy. This in turn affects unemployment as firms respond to interest rates. In this chapter, I explicitly model demand and supply of liquid assets under uncertainty. Households adjust their portfolios depending on their liquidity needs, and supply of liquid assets is affected by firms' entry decision. An increase in aggregate uncertainty raises interest rates thereby fewer firms enter, and if accompanied by a fall in productivity, unemployment rises by even more. A self-financed private asset purchase program can increase liquidity but leaves unemployment unchanged.
Author: Ayushi Bajaj Publisher: ISBN: 9780355307283 Category : Languages : en Pages : 115
Book Description
Decentralized markets where assets are useful as medium of exchange are also usually subject to private information. In the first chapter, I analyze how adverse selection affects liquidity and prices in such markets by studying the Shi (1995) and Trejos and Wright (1995) model with Lucas trees under adverse selection. While most studies focus on either pooling or separating equilibrium, I adapt the undefeated equilibrium refinement to make the selection based on fundamentals. Under pooling, the high-quality asset accepts a pooled price, and under separating is willing to signal quality through retention. A negative shock to the quality or quantity of lemons implies a switch in regime from no-information (pooling) to information revelation (separating) which leads to a discontinuous fall in aggregate welfare. In the second chapter I apply insights from the first chapter to help account for the debasement puzzle by interpreting Lucas trees as commodity money of different weights. Debasements constitute a puzzle under standard price theory because people voluntarily exchanged heavy coins for lighter ones; the difference being kept as seigniorage. To resolve this, I adopt Velde, Weber and Wright (1999) featuring a decentralised market with private information on indivisible coins. To disentangle indivisibility from imperfect recognizability, I use a proxy for divisibility by allowing lotteries on coins in trade. Indivisibility accounts for debasement if agents need a medium of exchange for low-value goods, for which heavy coins would not be traded. And, even a small degree of imperfect recognizability provides incentives for debasement due to adverse selection. Finally, in the third chapter I model household's portfolio choice with an endogenous supply of assets under uncertainty to analyze its effect on real interest rates and unemployment. Asset returns typically reflect a risk and liquidity premium, the size of which depends on the state of the economy. This in turn affects unemployment as firms respond to interest rates. In this chapter, I explicitly model demand and supply of liquid assets under uncertainty. Households adjust their portfolios depending on their liquidity needs, and supply of liquid assets is affected by firms' entry decision. An increase in aggregate uncertainty raises interest rates thereby fewer firms enter, and if accompanied by a fall in productivity, unemployment rises by even more. A self-financed private asset purchase program can increase liquidity but leaves unemployment unchanged.
Author: Marika Ilona Cabral Publisher: Stanford University ISBN: Category : Languages : en Pages : 290
Book Description
This dissertation consists of four distinct essays. In an essay entitled "Claim Timing and Ex Post Adverse Selection: Evidence from Dental 'Insurance, ' " I explore the impact of strategic timing on insurance market allocations. If people can delay a claim just long enough to buy more insurance coverage in anticipation of it, severe adverse selection may result, and in extreme cases, this can lead to the complete unraveling of an insurance market. I study these forces by analyzing dental treatments and insurance, with the goal of understanding insurance in the market for dental care and also revealing lessons that apply to insurance markets more broadly. Using rich claim-level data from a large firm, my analysis reveals that the strategic delay of treatment and the associated adverse selection may be an important factor in explaining why so few people have dental coverage in the US and why typical dental "insurance" contracts provide so little insurance. More generally, my results suggest that insurance products without contract features designed to limit coverage for strategically delayed costs (e.g., open-enrollment periods, pricing pre-existing conditions) may generate unraveling. An essay entitled "The Hated Property Tax: Salience, Tax Rates, and Tax Revolts" (with Caroline Hoxby), explores the relationship between the salience of the property tax and observed property tax rates. We hypothesize that high salience explains the unpopularity of the property tax, the level of the property tax, and prevalence of property tax revolts. To identify variation in the salience of the property tax over local jurisdictions and over time, we exploit conditionally random variation in tax escrow, a method of paying the property tax that makes it much less salient. We find that areas in which the property tax is less salient are areas in which property taxes are higher and property tax revolts are less likely to occur. In an essay entitled "Private Coverage and Public Costs: Identifying the Effect of Private Supplemental Insurance on Medicare Spending" (with Neale Mahoney), we explore the impact of private supplemental insurance on Medicare spending. Private supplemental insurance to "fill the gaps" of Medicare, known as Medigap, is very popular. We estimate the impact of this supplemental insurance on total medical spending using an instrumental variables strategy that leverages discontinuities in Medigap premiums at state boundaries. Our estimates suggest that Medigap increases medical spending by 57 percent---or about 40 percent more than previous estimates suggest. Back-of-the-envelope calculations indicate that a 20 percent tax on premiums would generate combined revenue and savings of 6.2 percent of Medicare baseline costs. An essay entitled "The Effect of Insurance Coverage on Preventive Care" (with Mark Cullen), explores the effect of insurance coverage on preventive care utilization. Using health insurance claims data from a large company, this paper examines the implementation of an insurance benefit design which differentially increased the marginal price of curative care (non-preventive care) while decreasing the marginal price of prevention. We examine the effect of the differential price change on the use of preventive procedures. We reveal evidence consistent with an important negative cross-price effect; that is, increases in the price of curative care can depress preventive care utilization.
Author: Roger E. Backhouse Publisher: OUP Oxford ISBN: 0191584800 Category : Business & Economics Languages : en Pages : 317
Book Description
Since the middle of twentieth century, economists have invested great resources into using statistical evidence to relate macroeconomic theories to the real world, and many new econometric techniques have been employed. In these two volumes, a distinguished group of economic theorists, econometricians, and economic methodologists examine how evidence has been used and how it should be used to understand the real world. Volume 1 focuses on the contribution of econometric techniques to understanding the macroeconomic world. It covers the use of evidence to understand the business cycle, the operation of monetary policy, and economic growth. A further section offers assessments of the overall impact of recent econometric techniques such as cointegration and unit roots. Volume 2 focuses on the labour market and economic policy, with sections covering the IS-LM model, the labour market, new Keynesian macroeconomics, and the use of macroeconomics in official documents (in both the USA and EU). These volumes will be valuable to advanced undergraduates, graduate students, and practitioners for their clear presentation of opposing perspectives on macroeconomics and how evidence should be used. The chapters are complemented by discussion sections revealing the perspectives of other contributors on the methodological issues raised.
Author: El Bachir Boukherouaa Publisher: International Monetary Fund ISBN: 1589063953 Category : Business & Economics Languages : en Pages : 35
Book Description
This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.
Author: Financial Crisis Inquiry Commission Publisher: Cosimo, Inc. ISBN: 1616405414 Category : Political Science Languages : en Pages : 692
Book Description
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
Author: Alvin E. Roth Publisher: Houghton Mifflin Harcourt ISBN: 0544291131 Category : Business & Economics Languages : en Pages : 275
Book Description
A Nobel laureate reveals the often surprising rules that govern a vast array of activities -- both mundane and life-changing -- in which money may play little or no role. If you've ever sought a job or hired someone, applied to college or guided your child into a good kindergarten, asked someone out on a date or been asked out, you've participated in a kind of market. Most of the study of economics deals with commodity markets, where the price of a good connects sellers and buyers. But what about other kinds of "goods," like a spot in the Yale freshman class or a position at Google? This is the territory of matching markets, where "sellers" and "buyers" must choose each other, and price isn't the only factor determining who gets what. Alvin E. Roth is one of the world's leading experts on matching markets. He has even designed several of them, including the exchange that places medical students in residencies and the system that increases the number of kidney transplants by better matching donors to patients. In Who Gets What -- And Why, Roth reveals the matching markets hidden around us and shows how to recognize a good match and make smarter, more confident decisions.
Author: Sylvia Walby Publisher: John Wiley & Sons ISBN: 150950320X Category : Social Science Languages : en Pages : 174
Book Description
We are living in a time of crisis which has cascaded through society. Financial crisis has led to an economic crisis of recession and unemployment; an ensuing fiscal crisis over government deficits and austerity has led to a political crisis which threatens to become a democratic crisis. Borne unevenly, the effects of the crisis are exacerbating class and gender inequalities. Rival interpretations – a focus on ‘austerity’ and reduction in welfare spending versus a focus on ‘financial crisis’ and democratic regulation of finance – are used to justify radically diverse policies for the distribution of resources and strategies for economic growth, and contested gender relations lie at the heart of these debates. The future consequences of the crisis depend upon whether there is a deepening of democratic institutions, including in the European Union. Sylvia Walby offers an alternative framework within which to theorize crisis, drawing on complexity science and situating this within the wider field of study of risk, disaster and catastrophe. In doing so, she offers a critique and revision of the social science needed to understand the crisis.
Author: Hian Teck Hoon Publisher: Routledge ISBN: 1000427218 Category : Business & Economics Languages : en Pages : 365
Book Description
Even after achieving the status of a developed economy, many economies face other challenges which may include economic stagnation and income inequality. The book looks at how a mature economy can continue to weather challenges and how the growth of living standards will depend on productivity growth through Singapore’s experience. After Singapore's rapid economic transformation, the nation is at a crossroads. The book explains how productivity growth in turn depends on technological diffusion from abroad as well as indigenous innovation. It also examines how the design of policy to develop indigenous innovation to promote economic dynamism may come with creative destruction and disruptive effects on jobs and wages. The Singapore Economy provides insight into how we can maintain social cohesion and establish a political equilibrium that embraces the new sources of growth through policy formulation for economic inclusion.
Author: Ayushi Bajaj
Author: Ayushi Bajaj
Author: Marika Ilona Cabral
Author: Filipe Balmaceda
Author: Matthew Bishop
Author: Roger E. Backhouse
Author: El Bachir Boukherouaa
Author: Financial Crisis Inquiry Commission
Author: Alvin E. Roth
Author: Sylvia Walby
Author: Hian Teck Hoon