Blockchain Papers

Fernando José La Calle Prada

No abstract is available for this record.

Peere Gomis-porquerass, Benoit Juulien, Chengsi Wang, Pedro Gomis-porqueras · 6 authors

In this paper we study the optimal monetary and fiscal policies of a general equilibrium model of unemployment and money with search frictions both in labor and goods markets\nas in Berentsen, Menzio and Wright (2010). We abstract from revenue-raising motives to focus on the welfare-enhancing properties of optimal policies. We show that some of the\ninefficiencies in the Berentsen, Menzio and Wright (2010) framework can be restored with appropriate fiscal policies. In particular, when lump sum monetary transfers are possible,\na production subsidy financed by money printing can increase output in the decentralized market and a vacancy subsidy financed by a dividend tax even when the Hosios’ rule does\nnot hold.

Anton Korinek

No abstract is available for this record.

Előd Takáts

No abstract is available for this record.

Wojciech Kopczuk, Joel Slemrod, Shlomo Yitzhaki

An optimal linear world income tax that maximizes a border-neutral social welfare function provides a drastic reduction in world consumption inequality, dropping the Gini coefficient from 0.69 to 0.25. In contrast, an optimal decentralized (i.e., within countries) redistribution has a miniscule effect on world income inequality. Thus, the traditional public finance concern about the excess burden of redistribution cannot explain why there is so little world redistribution.

Russell W. Cooper, Hubert Kempf

This article studies the effects of political institutions on inflation. In our view, hyperinflation is the manifestation of a tragedy of commons in a divided society with a weak central monetary authority. Economies with fiat money are inherently inflation-prone: the collection of seigniorage through the inflation tax is less conspicuous than other taxes, and the printing of money is essentially costless. In many countries, the control of the money supply is de facto or de jure decentralized. Sets of agents (in various regions or interest groups) can effectively pressure the central government to finance their expenditures. As these interest groups pursue their self-interest, they neglect the welfare effects of the inflation tax on individuals in other groups. These elements combine to imply that countries which rely on the inflation tax to meet the resource demands of competing interest groups will typically experience inefficiently (due to negative spillovers) high inflation.

Rosario Manasan

This short note provides a framework for looking at public sector governance and productivity improvements. It argues that the role of government in enhancing productivity growth is two-fold. First, government should provide an environment that is conducive in improving total factor productivity in private sector production. Second, government should work to increase the productivity of the public sector itself. In terms of providing the appropriate economic setting that is favorable to private-sector-led development, government needs (1) to provide the macroeconomic and the microeconomic environment that will establish incentives for firms/individuals to act in accordance with the invisible hand had there been no market imperfection, (2) to provide the institutional infrastructure (i.e., property rights, law and order, rules and even application and enforcement of the same) that markets need to work efficiently; and (3) to ensure the financing/provision of adequate basic health care and education, and basic physical infrastructure (World Bank 1992). In particular, the instruments that government may use in this regard are include (1) direct government interventions in the product markets as defined by the regulatory structure in strategic sectors, and (2) economy-wide policies like financial liberalization, trade liberalization, and foreign investments liberalization. On the other hand, (1) budget reform (2) the installation of a system of performance measurement and incentive in the public sector, (3) the re-engineering of the bureaucracy, (4) the combating of corruption, and (5) decentralization are the key features of a program that will increase the productivity of government operations.

Yoshirō Miwa, J. Mark Ramseyer

Alexander Gerschenkron argued that banks facilitate growth in “backward” countries, and modern theorists sometimes similarly claim that banks can promote growth by reducing informational asymmetries and improving the allocation of funds. Japan has played a part in these debates. In early twentieth‐century Japan, firms relied heavily on bank debt, observers argue. Those firms with preferential access to debt outperformed the others, and those that were part of the zaibatsu corporate groups obtained that access through their affiliated banks. In fact, Japanese banks did not play the role attributed to them. Japan was not a bank‐centered economy; instead, firms relied on equity finance. It was not an economy where firms with access to banks outperformed their rivals; instead, such firms earned no advantage. And it was not a world in which the zaibatsu manipulated their banks to favor affiliated firms; instead, zaibatsu banks loaned affiliated firms little more than the deposits those firms had made with the banks. During the first half of the last century, Japanese firms obtained almost all their funds through decentralized, competitive capital markets.

Eduard Braun

The current economic problems in Southeast Asia can be attributed not to too much reliance on financial markets, but to too little . Like the U.S. economy a century ago, the emerging Asian economies do not have welldeveloped capital markets and so remain heavily dependent on their banking systems to finance growth. For all its benefits, banking is “not only basically 19th‐century technology, but disaster‐prone technology.” The extreme maturity (and, in some cases, currency) mismatch on banks' balance sheets plus the first‐come, first‐served nature of the deposit obligations mean that banks are inherently vulnerable to massive runs by depositors—and that their economies are subjected to periodic credit crunches. And, as the author says, “in the summer of 1997 a banking‐driven disaster struck in East Asia, just as it had struck so many times before in U.S. history.” In this century, In this century, the U.S. economy has steadily reduced its dependence on banks by developing “dispersed and decentralized” financial markets. In so doing, it has increased the efficiency of the U.S. capital allocation process and reduced its susceptibility to the credit crunches that have occurred throughout U.S. history. By contrast, Japan has not reduced its economy's dependence on banks, and its efforts to deal with its banking problems have served only to destabilize itself as well as its neighbors. Developing countries in Southeast Asia and elsewhere are urged not to follow the Japanese example, but to take measures aimed at developing financial markets and institutions that will either substitute for or complement bank products and services.

James M. Boughton

The World Economic Outlook (WEO) exercise at the IMF evolved during the 1980s, partly in response to demands by policymakers in national finance ministries for objective and internationally comparable projections and policy scenarios. The exercise had begun as a staff initiative, encouraged by the Managing Director (Johannes Witteveen). Gradually, the Executive Board, the Interim Committee, the Group of Seven, and others came to view the discussion of the WEO documents as an important element in their efforts to keep abreast of world economic developments and prospects. Direct and indirect feedback from those discussions informed the staff as to how the exercise should be improved. Driven by this policy relevance, the WEO evolved from a decentralized project that was only haphazardly model-based into a more rigorous and coordinated exercise.

Vasilis Kostakis, Chris Giotitsas

The still raging financial crisis of 2007–2008 has enabled the emergence of several alternative practices concerning the production, circulation, and use of money. This essay explores the political economy of the Bitcoin ecosystem. Specifically, we examine the context in which this digital currency is emerging as well as its nature, dynamics, advantages, and disadvantages. We conclude that Bitcoin, a truly interesting experiment, exemplifies “distributed capitalism” and should be mostly seen as a technological innovation. Rather than providing pragmatic answers and solutions to the current views on the financial crisis, Bitcoin provides some useful and timely questions about the principles and bases of the dominant political economy. A ECONOMIA POLÍTICA DO BITCOINResumoO aquecimento da crise financeira de 2007-2008 permitiu o surgimento de várias práticas alternativas em matéria de produção, circulação e uso do dinheiro. Este ensaio explora a economia política do ecossistema Bitcoin. Especificamente, vamos examinar o contexto em que essa moeda digital está emergindo, bem como a sua natureza, dinâmica, vantagens e desvantagens. Concluímos que Bitcoin, uma experiência verdadeiramente interessante, exemplifica "capitalismo distribuído" e deve ser visto principalmente como uma inovação tecnológica. Em vez de fornecer respostas e soluções pragmáticas para os pontos de vista atuais sobre a crise financeira, Bitcoin fornece algumas perguntas úteis e oportunas sobre os princípios e as bases da economia política dominante.