Wealth effects, distribution, and the theory of organization

Article Abstract:

A general equilibrium model of forming a firm where organization originates internally is developed. Firms comprise agents providing a fixed capital investment and efforts. Given sufficient wealth in the firm, effort provision problems can be solved while costly state verification problems would be non-existent if the firm can be self-financed. If wealth distribution is unequal, a costly monitoring or auditing technology is imperative. Firms consist of one type of agent and are organized efficiently when borrowing is not costly. However, distribution of wealth will determine the firm's membership when the costly state verification problem is serious.

Economics, Research and Development in the Social Sciences and Humanities, Distribution (Economics), Wealth

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Bankruptcy as a control device in economies in transition

Article Abstract:

The question of whether bankruptcy policy attains its objectives of efficient resource allocation and efficient managerial processes was analyzed in a model of a formerly socialist economy featuring imperfect information. The inefficiencies within the model were due to intention of central planners to offer incentives to managers. It was concluded that an optimal bailout policy always results in inefficient resource allocation.

Bankruptcy law, Information theory, Bankruptcy, Central planning, Information theory in economics

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The Roman Catholic Church and the economic system: a review essay

Article Abstract:

A study was conducted to examine the relationship between church doctrines and economic systems. The study focuses on Pope John Paul II's Centesimus Annus (CA) and considers its philosophy behind several economic issues. Results show that the CA reflects church acceptance of basic tenets of capitalism. However, some minor changes are expected for total acceptance of the economic system.

Economic policy, Religion, John Paul II, Pope, Catholic Church, Religion and economics

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