Could making banks hold only liquid assets induce bank runs?

Restrictions placed on bank portfolios are analyzed in a banking model designed to capture the role of checking accounts in facilitating transactions. Forcing banks to hold only liquid assets creates the incentive for liquidity-based runs. Even when a run does not occur, welfare is reduced as a result of overinvestment in the liquid asset.     

The Last Half-Century,Societal Change and Politics in America

In a series of articles and books, John Walker and Harold Vatter extended the arguments made earlier by Evsey Domar that the U.S. economy suffers from chronically insufficient demand that leads to growth below capacity. Their analysis of secular growth complements the well-known writings of Hyman Minsky, who also emphasized the role of the “big government” and the “big bank” in stabilizing an unstable economy over the cycle. Like Minsky, Vatter and Walker argued that U.S. capitalism has evolved through several distinct forms, although they characterize the last one hundred years as a period of secular stagnation. This article will summarize, provide support for, and extend the Vatter and Walker approach, concluding with an examination of some of the dangers facing the U.S. economy today.     

Einzelbesprechungen

Ohne Zusammenfassung     

Entering the regime of automobility: car ownership and use by novice drivers in Iceland

This article investigates how young individuals access the regime of automobility. Instead of looking at the systemic nature of automobility, the article concentrates on its human component. Access to cars by young people in the greater Reykjavík area, and the shift in modal choice that occurs when they start driving, was investigated with a survey among high school students that yielded 553 answers. The results show that young residents in the capital area are fully aware of the costs of car-based automobility. Their near-universal move to cars when they enter driving age reflects the conditions of this regime. Yet they are also ambivalent about their position within the regime. While most previous studies of novice drivers have centred on road safety issues, this study shows the need to consider the cultural and social aspects of young people driving. This can lead to a deeper understanding of the modal shift that perpetuates car-based automobility, which is an important issue for transport planning.     

The Integrative Effect of Electronic Data Processing

Electronic data processing systems have been constructed based on the results of cybernetics and communication theory. They interpret the combination of several constructs as integrated systems that form integrated systems of a higher degree. This corresponds to the way modern economics looks at corporate functions, enterprises, the economy... This fundamental tendency is reflected by the idea that the most important factor in electronic data processing systems is not the speed of operation but the integrative effect. Therefore it is necessary to arrange workflows in a closed control system, under consideration of the most rational path. Thus IDP advances the aims of business organization to a higher level and at the same time provides means for reaching these aims. Reprint of an article from elektronische datenverarbeitung 1(1)1959:14–19. The original summary has been revised by the editorial staff. This article is also available in German in print and via http://www.wirtschaftsinformatik.de: Kettner KH (2008) Der Integrationseffekt elektronischer Datenverarbeitung. WIRTSCHAFTSINFORMATIK. doi: .     

Returns Before and After Tax Using Sum - of- Years -Digits Depreciation

The sum-of-the-years (SYD) depreciation method complicates the relationship between the before- and after-tax returns. This paper explains the mechanics of the SYD method and develops a procedure for analyzing its influence on the overall levels of profitability. The computer is used in a parametric analysis culminating in a series of curves that can simplify the calculations in practice. In these curves, returns are made non-dimensional by dividing by the investment, the ratio being the capital recovery factor (CRF).     

Price Ceilings on Milk Production Quota Values: Future or Folly?

Since the inception of supply management in Canada during the 1970s, milk production quota has been used to regulate output and participation in the dairy industry. In recent years, milk quota values have increased dramatically, almost tripling in value since the mid 1980s. This led to the Dairy Farmers of Ontario intervening on the milk production quota exchange on two occasions: first, in November 2006 with a progressive transfer assessment and then in July 2009, replacing the former policy with a firm price ceiling—fixing the unit price of quota at $25,000. These policies represent a significant redistribution of economic benefits from milk producers selling their quota to those remaining in the industry. The objective of this study is to first explore the reasons for the increase in production quota values; and second, to assess the welfare and distributional effects of each of the two quota policy schemes. Our results suggest that the increase in quota values were driven by basic economic factors and that the efficiency losses from intervention in the quota exchange are nontrivial. We conclude by suggesting there are several alternative policy options that could minimize efficiency losses while moderating the escalation in quota values. Depuis la mise en place du système de gestion de l’offre au Canada dans les années 1970, les quotas laitiers sont utilisés pour régulariser la production et la participation dans l’industrie laitière. Au cours des dernières années, la valeur des quotas laitiers a fait un bond considérable et a pratiquement triplé depuis le milieu des années 1980. Cette situation a amené la Dairy Farmers of Ontario à intervenir à deux reprises dans le système d’échange de quotas laitiers : en novembre 2006, en imposant l’établissement d’un transfert progressif et en juillet 2009, en remplaçant la politique précédente par l’établissement d’un prix plafond ferme fixéà 25 000 $. Ces politiques permettent une importante redistribution des avantages économiques lorsque des producteurs de lait vendent leurs quotas à des producteurs qui demeurent dans le secteur. La présente étude visait d’abord à examiner les raisons qui sous‐tendent l’augmentation de la valeur des quotas de production et ensuite àévaluer le bien‐être et les effets distributifs de chaque plan de quotas. Les résultats de notre étude autorisent à penser que l’augmentation de la valeur des quotas a été motivée par des facteurs économiques fondamentaux et que les pertes d’efficacité découlant de l’intervention dans les échanges de quotas n’étaient pas sans importance. En conclusion, nous estimons qu’il existe plusieurs politiques de rechange qui pourraient minimiser les pertes d’efficacité tout en modérant l’escalade de la valeur des quotas.     

Investment and employment from large-scale photovoltaics up to 2050

Investments in renewable energy were at US$211 billion in 2010 and developing economies overtook developed ones for the first time in terms of new financial investments in renewable energy. Photovoltaics for generation of electricity from sunlight has the highest growth rate among the competing forms of renewable energy and has now begun to achieve grid parity in some regions. If these trends of investments continue, solar energy will play a major economic role. We analyze these developments and assess the ensuing amounts of investment and employment for a range of sizes of the sector of solar energy. We find that by 2050 electricity from photovoltaics could cover up to 90% of total global energy demand, with a then global capital investment in our main scenario in photovoltaic manufacturing capacity at 500 billion US$211 billion in 2010 and developing economies overtook developed ones for the first time in terms of new financial investments in renewable energy. Photovoltaics for generation of electricity from sunlight has the highest growth rate among the competing forms of renewable energy and has now begun to achieve grid parity in some regions. If these trends of investments continue, solar energy will play a major economic role. We analyze these developments and assess the ensuing amounts of investment and employment for a range of sizes of the sector of solar energy. We find that by 2050 electricity from photovoltaics could cover up to 90% of total global energy demand, with a then global capital investment in our main scenario in photovoltaic manufacturing capacity at 500 billion US₂₀₁₀ by around 2030 and 1,500 billion by 2050. Employment in photovoltaic manufacturing is predicted to rise to 6 million by 2050. Sensitivity analysis with respect to the core parameters of assumptions is supplied.     

Regional and environmental impacts of expanding the heavy duty vehicle charge to the secondary road network in Austria

In road freight transport a particularly large share of the total social costs generated is not borne by road users. To correct for this, many European countries use pricing instruments specifically targeted at heavy duty vehicles, so far targeted almost exclusively at the primary road network. In line with the overall EU objective of greening the transport sector, we discuss the possibility of expanding the road charging system to a more comprehensive, area-wide one. The degree to which peripheral or disadvantaged regions are hit over-proportionally by such a measure remains an open question in the literature on heavy duty vehicle road pricing. We combine an input–output and a computable general equilibrium approach to analyse the case for Austria. We find that while it is not the sectors of highest economic importance in the periphery regions that are hit by the charge, those sectors that are hit are those which are relatively more important in peripheral regions (with up to a twofold share in value added) and for whom production price impacts tend to be relatively strong. The short term consumer price effect of extending the current primary road network charges to the secondary network is found not to exceed 0.15%. In terms of the principles of sustainable transport we find that extending charge coverage is compatible with most core principles, the exception being the principle of regional need. In terms of environmental impact, for example, expanding heavy duty vehicle charges to the secondary road network reduces heavy duty vehicle kilometres in the overall network (and related emissions) by roughly 2%. However, in order to comply with the needs principle, suitable complementary transfer policies need to be designed and implemented for peripheral regions.