The optimal inflation tax when money reduces transactions costs: a reconsideration

Article Abstract:

It has been asserted since 1973 that the optimal inflation tax rate is 0% if money acts as an intermediate good. The report reeexamines this therory where money is used to reduce transactions expenditure under income and consumption taxes. The report considers minimal conditions, such as non-decreasing shopping time and the convexity of transactions costs technology. Results show that the optimal zero inflation tax rates relies on the type of transactions technology.

Tax research

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Financial contracts when costs and returns are private

Article Abstract:

An analysis describing the nature of financial contracts is presented. Bnaks require a form of commitment contract similar to credit lines. Costly random returns and unknown random costs set conditions for commitments to supercede ordinary debt contracts. This advantage is generated by the use of fees that decrease default risk, which allow larger loan applications. Financial intermediation thus validate the use of commitment contracts.

Economic aspects, Contracts, Bank loans

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Real-time gross settlement and the costs of immediacy

Article Abstract:

Research investigating payment systems' welfare costs is presented. Particular attention is given to payment systems operating as a real-time gross settlement system. It is concluded that constraints imposed by gross settlement systems influence the systems' costs.

Finance, Real time systems, Real-time systems

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