Arbitrage pricing and the stochastic inflation tax in a multisector monetary economy

Article Abstract:

An equilibrium arbitrage pricing theory (EAPT) model is developed. The model gives weight to the covariance between the inflation tax, distorted equilibrium returns and fundamental forcing processes in establishing equilibrium risk prices. The results model showed that when there is equilibrium, the risk prices identified with a certain parameter such as technological innovations are functions of the following period's inflation tax. Thus, expectations of monetary policies are seen to influence the level of the current risk premia associated with technological innovations.

Pricing, Monetary policy

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Optimal tax rules in a dynamic stochastic economy with capital

Article Abstract:

The search for an optimal taxation strategy within an economy demonstrating neoclassical stochastic growth trends is discussed. Rules for taxation are identified and two turn out to be the most significant. These rules refer to the desirability of both high consistent state investment and fairly small investment fluctuations. The former rule is especially effective in inducing optimality.

Fiscal policy

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Seigniorage and conventional taxation with multiple exogenous shocks

Article Abstract:

Traditional optimum taxation models are challenged and concepts of optimum seigniorage discussed. A dynamic optimizing model allowing for three exogenous shocks is described.

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