A strategic market game with seigniorage costs of Fiat money

Summary. A model that includes the cost of producing money is presented and the nature of the inefficient equilibria in the model are examined. It is suggested that if one acknowledges that transactions are a form of production, which requires the consumption of resources, then the concept of Pareto optimality is inappropriate for assessing efficiency. Instead it becomes necessary to provide an appropriate comparative analysis of alternative transactions mechanisms in the appropriate context. Received: September 5, 2000; revised version: May 3, 2001     

Strategic freedom, constraint, and symmetry in one-period markets with cash and credit payment

Summary. In order to explain in a systematic way why certain combinations of market, financial, and legal structures may be intrinsic to certain capabilities to exchange real goods, we introduce criteria for abstracting the qualitative functions of markets. The criteria involve the number of strategic freedoms the combined institutions, considered as formalized strategic games, present to traders, the constraints they impose, and the symmetry with which those constraints are applied to the traders. We pay particular attention to what is required to make these strategic market games well-defined, and to make various solutions computable by the agents within the bounds on information and control they are assumed to have. As an application of these criteria, we present a complete taxonomy of the minimal one-period exchange economies with symmetric information and inside money. A natural hierarchy of market forms is observed to emerge, in which institutionally simpler markets are often found to be more suitable to fewer and less-diversified traders, while the institutionally richer markets only become functional as the size and diversity of their users gets large.Received: 5 June 2003, Revised: 18 November 2003, JEL Classification Numbers: C7, G10, G20, L10, D40, D50. Correspondence to: Eric SmithEric Smith, Martin Shubik: We are grateful to Lloyd Shapley, Duncan Foley, and Doyne Farmer for discussions in the course of this work.     

Long memory in volatilities of German stock returns

We show that there is strong evidence of long-range dependence in the volatilities of several German stock returns. This will be done by applying a method using the difference of the classical log-periodogram regression estimator for the memory parameter and of the tapered periodogram based estimator. Both estimators give similar values for the memory parameter for each series and this indicates long memory. To support our findings we apply also a methodology using the sample variance and a wavelet based estimator to the data. Also these two methods show clear evidence of long-range dependence in the volatilities of German stock returns.First version received: December 2001/Final version received: March 2003The computational assistance of Eleni Mitropoulou and Björn Stollenwerck as well as the helpful comments of two unknown referees are gratefully acknowledged. Research supported by Deutsche Forschungsgemeinschaft under SFB 475. Stock returns were obtained from Deutsche Finanzdatenbank (DFDB), Karlsruhe.     

Gold,liquidity and secured loans in a multistage economy

A multistage economy with durables with finite and with unbounded lives is considered. The importance of the existence of both asset and rental markets is considered. It is shown that without rental markets efficiency may not be achieved and a stationary state that might exist with rental markets need not exist. The meaning of the existence of a 100% backed loan is considered. The roles of gold and land as stores of value and money are considered.Research supported in part by ONR Grant N00014-86-K-0220 and by NSF Grant No. SES-8812051.     

Outsourcing, Imports and Labour Demand

This paper examines the effects of purchased services and imported intermediate materials on the labour demand for different skills in German manufacturing sectors. We derive and estimate a factor demand system based on the generalised Box–Cox cost function nesting both the normalised quadratic and the translog functional form. We find that the impacts of output and capital growth are more important in explaining the demand for heterogeneous labour than substitution effects between labour and non–labour inputs. Similarly, the increasing use of both imported materials and purchased services is a consequence of output growth rather than input substitution.
JEL classification : J 23; O 33     

Structure,Clearinghouses and Symmetry

We introduce and justify a taxonomy for the structure of markets and minimal institutions which appear in constructing minimally complex trading structures to perform the functions of price formation, settlement and payments. Each structure is presented as a playable strategic market game and is examined for its efficiency, the number of degrees of freedom and the symmetry properties of the structure     

Representation and Educational Background of European Economists in Top Journals of Economics

We assess the contribution of European authors to 10 topjournals of economics from 1980 to 1998. Despite efforts on the European Union and national levels topromote academic excellence, European authors still play a minor role in top journals. Examining the development overtime we find little evidence for an increasing share of European contributions. Particular attention has been paidto the educational background of European authors. There is still a segmentation of academic education alonglanguage barriers in continental Europe. However, a considerable proportion of European authors has received a PhD from the US.     

中国和印度不平衡发展的比较研究

本文考察了中国和印度近年来经济增长不平衡的情况,并分析了不平衡增长对不均等和贫困的影响。通过对家庭调查数据和官方加总数据的分析,本文发现增长存在不平衡——区域间、产业间和家庭层面上,这表明减贫工作进展不平衡,若增长更平衡,减贫效果可能更好;另外,收入不均等程度也在提高。本文探讨了增长不平衡及其应引起重视的原因。具体讨论围绕"有利的"和"不利的"不均等两个概念展开——不均等与不平衡增长对公平性以及长期增长与发展的有利或不利影响。我们认为,需要制定相关政策,保持有利的不均等——继续鼓励创新和投资,同时降低不利的不均等的程度,尤其是通过人力资本和农村基础设施投资,帮助贫困人口参与市场。     

Fit performance of several programs used for non-linear least squares problems

Seven computerprograms for non-linear regression or curve fitting problems are compared. The comparison of the programs, running in different computing centra, is restricted to the fit performance. Six model functions are fitted according to the least squares criterion to data series, arising from practical work. The special least squares minimization programs turned out to be better suited for these problems than general optimizing programs.     

PRICES AND PRICE ANALYSIS IN THE FRAMEWORK OF THE NATIONAL ACCOUNTS

The paper discusses the role of prices in the framework of the new System of National Accounts (SNA) in terms of three major uses: (1) deflation, (2) price indicators, and (3) price analysis. Following a brief review of the price and quantity measures required by the new SNA with its emphasis on deflation of commodity flows and input-output accounts, in addition to the more conventional deflation of final demand categories, the paper discusses some of the conceptual, methodological and data problems involved in implementing the various uses of prices in the new SNA. Implementing the use of prices as deflators depends, in part, on the concept of output selected (national versus domestic; gross versus net), and which of six concepts of valuation, ranging from purchasers'value to true factor cost, is used. Some of the difficulties in deflating nonmarket flows (e.g., interplant transfers) and industry value added, based on the double deflation method, are discussed. In concept price deflators, which have shifting weights, cannot be used as price indicators, which should have fixed weights. In practice, this is often disregarded and the deflators are used as price indicators. The paper support the SNA recommendation for the development of price indexes with fixed weights to be used as price indicators, in addition to the implicit price deflators. Research in the United States indicates that differences in weights can result in different price measures for various subperiods, components of demand and sector output. Periodic revisions in weights to provide more current fixed weights for price and quantity indexes in each subperiod may minimize the problem but it introduces a new problem—lack of comparability with the constant price tables in the SNA which have fixed weights for the entire period. The new SNA provides a comprehensive and integrated framework for price analysis including the analysis of the structure of aggregate price changes, the industrial origin of final demand prices, and the impact of price change in one sector of the economy on the rest of the economy. Some major gaps which need to be overcome in order to implement the use of the new SNA for price analysis include the development of industry capital stock estimates, separate estimates of proprietors’income, reconciliation of value added and distribution share estimates, and the development of a wide variety of information to supplement the conventional input-output tables in the SNA. Implementing the various objectives of price measures within the framework of the accounts will require a number of improvements in existing price measures and expanding the scope of coverage. “List” prices should be superseded by “transactions” prices and better techniques and data need to be developed to provide for quality adjustment of prices. Coverage will need to be expanded to include services, freight rates, trade margins, government expenditures, and also fill in gaps for many manufactured products. Finally, where possible, use of unit values as price indexes or deflators, e.g., imports and exports, should be replaced by direct price measures.