The impact of financial intermediaries on stationary interest rates

Article Abstract:

Financial intermediation is added to a stationary overlapping generation model with multiple goods and consumers to determine its effects on stationary interest rates. The profits or commissions of the financial intermediary from the exchange of money is used as an exogenous transaction cost parameter which do not affect the model as long as they remain small. However, substantial transaction costs allows a natural selection process of efficient equilibria if they coincide with an equilibrium interest rate that maximizes the commissions of the financial intermediary.

Management, Interest rates, Financial institutions

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On regular symmetric economies

Article Abstract:

Symmetry considerations and Jacobian matrices computations of aggregate excess demand are used to prove that regular symmetric economies of a sunspot model with complete markets coincides with regular economies of the underlying model without uncertainty. The model, which also provided data on a set of critical equilibria, provides and alternative proof to the similar findings of a study by Balasko, Cass and Shell. The approach can also be applied to other models of economic theory.

Symmetric functions

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Optimal futures innovation in a dynamic economy: the discrete-time case

Article Abstract:

The optimal futures innovations is considered in a dynamic economy. How the outcome from a static economy should be revised due to the possibility of dynamic trading is likewise analyzed. Three various concepts of ex ante optimality are studied, depending on the authority's ability to redistribute wealth among the investors and describes the optimal futures innovations in each sense.

Econometrics & Model Building, Econometrics, Markets (Economics), Business models

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