Some unpleasant budgetary arithmetic of a proposal to end inflation: a comment

Article Abstract:

The proposal to create a new financial instrument called quasi-futures contract (QFC) to solve inflation is evaluated using a representative agent model. The proposal has budgetary constraints because it suggests transferring of resources between the private sector and the government. The price and interest levels of QPC should be fixed to induce non-inflationary price levels. Moreover, a balanced intertemporal government budget should be maintained to solve inflation.

Financial instruments, Price fixing

---

Some unpleasant budgetary arithmetic of a proposal to end inflation: a reply

Article Abstract:

Fixing the price of quasi-futures contracts (QFC) will not result in the discrepancy between the market interest rate and the discount rate used by QFC traders. The discrepancy would have resulted in destabilized actual price levels, making the QFC proposal ineffective in controlling inflation. Although the proposal could not survive consistent fiscal shocks, it is as good as any other anti-inflationary techniques such as gold standard and monetarist rule.

Budget, Budgeting, Budgets

---

The borrower's curse: comment

Article Abstract:

Some of the results of D. de Meza and C. Southey's study regarding the impact of entrepreneurs holding biased perspectives on project success and payoff size invite comment. de Meza and Southey utilized a framework supporting a proportion of borrowers with over optimistic views on the success probability of their projects. The proposition that entrepreneurs may be credit rationed fails when the options over-estimate payoffs.

Debt Management-Bank Loans, Entrepreneurship, Business success, Bank loans, Loan servicing

Similar abstracts:

• Abstracts: Market behavior in the presence of costly, imperfect information: experimental evidence. Examining risk preferences under high monetary incentives: experimental evidence from the People's Republic of China
• Abstracts: An implementation-theoretic approach to non-cooperative foundations. Bargaining in a long-term relationship with endogenous termination
• Abstracts: Bayesian model selection and prediction with empirical applications: comments. Trending time series and macroeconomic activity: Some present and future challenges
• Abstracts: Secret reserve prices in a bidding model with a resale option. On fully revealing prices when markets are incomplete
• Abstracts: Order characteristics and stock price evolution: an application to program trading. Common factors in prices, order flows, and liquidity

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.