Futures and actual markets: how they are related
Article Abstract:
The relation between monetary and real phenomena takes the same form as the relation between a futures contract and the underlying asset; by demonstrating such an isomorphism between moneys and futures, these two branches of economics will each be better understood. A number of correspondences between the theory of money and the theory of futures markets are shown, including borrowing and lending in monetary theory and short and long hedging in futures theory. As with monetary theory, there is a real and nominal interest rate implicit in futures; futures contracts themselves are analogous to bank notes; inventory firms are similar to banks; open contracts are like the total stock of money; and hedging commitments are analogous to reserves.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1986
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Average marginal tax rates from social security and the individual income tax
Article Abstract:
Average marginal tax rates for federal income taxes and social security taxes on labor earnings are calculated for the period from 1980 to 1983, with a brief comparison to similar tax rates since 1916. The social security tax is more efficient than the income tax; social security taxes generate 2.5 times more revenue per unit of average marginal tax rate than income taxes. This is because the social security tax is levied at a flat-rate, as opposed the graduated taxes on income, and because the social security tax rates approach zero at their uppermost levels. Of these two features, the flat-rate attributes of social security tax are identified as the cause for the tax's efficiency relative to income taxation.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1986
User Contributions:
Comment about this article or add new information about this topic:
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