The value of money in a dynamic equilibrium model

Summary. This paper studies the pricing of money in an infinite-horizon economy with heterogeneous agents, incomplete financial markets and arbitrary borrowing restrictions. Purchases of the consumption good are subject to a cash-in-advance constraint. Under general conditions I show that the price of money is equal to its fundamental value, where this value is defined over all state-price processes that are compatible with the existence of no-arbitrage opportunities. This equality implies that the cash-in-advance constraint is binding infinitely often for all agents in the economy. The analysis highlights certain differences in the determination of the price of money with respect to models with money in the utility function that bear on the optimal implementation of economic policies.Received: 23 October 2003, Revised: 26 August 2004 JEL Classification Numbers: D52, E44, G12.M.S. Santos: This paper is an outgrowth of an earlier collaboration with Michael Woodford. I have also benefitted from various discussions with Eduardo Gimenez, Alejandro Hernandez, and Miguel Iraola. Some very useful comments by an anonymous referee are greatly appreciated.     

Should I Stay or Should I Go? Geographic Entrepreneurial Choices in Brazilian Franchising

In the broad empirical literature on franchising, performance outcomes of location decisions appear to be a largely forgotten issue. Yet franchising represents a rich context to study the impact of geographic entrepreneurial choices. Addressing this “blank spot” in the literature, we deal with the following question: Is it better for a chain to stay in the same geographic area, or to expand via distant franchised units? Our econometric estimations on new and unique Brazilian panel data show that spatial agglomeration of chain outlets leads to higher performance, suggesting that agglomeration gains outweigh cannibalization and spatial monopoly effects.     

The effect of firm size and firm activities on CSR practices of selected Chinese-Filipino-owned MSMEs in Metro Manila

Socially-responsible business and ethical behavior of companies have been of interest to academia and practice for decades, but the focus has almost exclusively been on large corporations, while small and medium-sized enterprises （SMEs） have not received as much attention （Hammann, et al., 2009）. Worthington, et al （2006） recognized the need to encourage socially-responsible business practices among the 90 per cent or more of the world＇s businesses that are classified as SMEs. Perrini, et al （2007） found that size explains the differences in firms＇ willingness to define and implement such specific corporate social responsibility （CSR） strategies, while Murillo and Lozano （2006） concluded that it still remains to be explored whether manufacturing companies tend to apply CSR more extensively, or whether businesses oriented to other business have a tendency to incorporate CSR into their management patterns to a higher degree. Moreover, President Gloria Macapagal-Arroyo, in her 7 June, 2002 speech, recognized the importance of Chinese-Filipinos in helping improve the Philippine economy, and yet, not much research had been done on this sub-sector. Thus, this paper focuses on the effect of finn size and finn activities on the social responsibility practices of selected 30 micro, small and medium-sized enterprises （MSMEs） in Metro Manila which are owned by Chinese-Filipinos. Survey questionnaires and interview were used for gathering data, while a correlations test was used to analyze the data and to conclude whether finn size and finn activities have an effect on the sampled companies＇ CSR practices.     

The legacy of European Capitals of Culture to the “smartness” of cities: The case of Guimarães 2012

The objective of the paper is to examine the extent to which the legacy of European Capitals of Culture (ECOC) increases the “smartness” of cities. A qualitative approach based on semi-structured interviews and desk research was used to assess the impact on the smart city's dimensions hypothesized by Giffinger et al. (2007 Giffinger, R., Fertner, C., Kramar, H., Kalasek, R., Pichler-Milanovic, N., &; Meijers, E. (2007). Smart cities—Ranking of European medium-sized cities (Report). Vienna University of Technology Retrieved November 25, 2015, from http://www.smart-cities.eu/download/smart_cities_final_report.pdf [Google Scholar]). The research revealed that this kind of mega-event reinforces the smartness of the city in which it is hosted in terms of attributes such as living, economy, people and environment. No significant legacy is observed with respect to the mobility dimension.     

A fuzzy model to assess the resilience of Protection and Civil Defense Organizations

Resilience is the intrinsic ability of a system to adjust its functioning prior to, during, or following changes and disturbances, so that it can sustain required operations under expected and unexpected conditions. Protection and Civil Defense Organizations (PCDOs), communities and cities deal with disaster management involving routine, non-routine and even unpredictable/unforeseen situations with varying degrees of complexity. It is important that such organizations continually assess their resilience, enable them to learn on their weaknesses and real capacities to cope with emergency situations. This research aimed the development of an Organization Resilience Indicator System (ORIS) based on a fuzzy model to enable PCDOs self-assesses their resilience. Based on a literature review on organizational and community’s resilience, a system of resilience indicators was defined. This system was validated by experts using fuzzy set theory to aggregate opinions in the development of a resilience ideal pattern. Then, the resilience of four PCDO organizations was self-evaluated. The results were accordingly to maturity level of the organizations evaluated, indicating that the ORIS is valuable to measure PCDOs resilience.     

Do banks price their informational monopoly?

Theory suggests that banks’ private information lets them hold up borrowers for higher interest rates. Since new information about a firm is revealed at the time of its bond IPO, it follows that banks will be forced to adjust their loan interest rates downwards after firms undertake their bond IPO. We test this hypothesis and find that firms are able to borrow at lower interest rates after their bond IPO. Importantly, firms that get their first credit rating at the time of their bond IPO benefit from larger interest rate savings than those that already had a credit rating. These findings provide support for the hypothesis that banks price their informational monopoly. We also find that it is costly for firms to enter the public bond market.