Browsing by Subject "Neutrality of money"

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    Does money matter? A deterministic model with cash-in-advance constraints in factor markets
    (Springer, Berlin, Heidelberg, 1999) Başçı, Erdem; Sağlam, İsmail; Alkan, A.; Aliprantis, C. D.; Yannelis, N. C.
    This paper points to the importance of finance constraints in affecting competitive outcomes in economies that operate with money. We study a simple dynamic economy that operates through the use of fiat money under cash-in-advance constraints in all markets. We assume that the labor market opens before the goods market and the total money stock changes at a constant rate. After describing the economy, we define and characterize its stationary monetary competitive equilibria (Sl\ICE). In all cases where SMCE exist, the real wage is observed to be below the marginal product of labor and negatively related to the money growth rate, leaving positive pure profits to the firms. Only under Friedman's optimal money supply rule, zero pure profits are obtained. Neutrality of money is also studied in this context. In cases where the SMCE is unique, the equilibrium is Pareto efficient and money is neutral. In the case of continuum of equilibria and under sticky wages, which is consistent with market clearing in this model, the level of money stock can affect levels of output, employment, and welfare.
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    Markets as institutions
    (1995) Başçı, Erdem
    This dissertation investigates resource allocation via institutions. A unifying framework for studying various kinds of institutional structures is provided. After the introductory Part 1, Part 2 presents the general model (Chapter 1) and studies existence of equilibria (Chapter 2). Part 3 provides applications to general equilibrium models under complete markets (Chapter 3), public goods and Lindahl prices (Chapter 4), generalized price systems and sales taxes (Chapter 5), lemons type quality problems (Chapter 6). adverse selection and money (Chapter 7), and a model with Markov technologies and freedom effects on utilities (Chapter 8). welfare implications of most applications are investigated. Chapter 9 discusses further applications and possible future research topics.