On the importance of sequencing of markets in monetary economies

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dc.citation.epage316en_US
dc.citation.spage297en_US
dc.contributor.authorBaşçı, Erdemen_US
dc.contributor.authorSağlam, İsmailen_US
dc.contributor.editorSertel, M. R.
dc.contributor.editorKoray, Semih
dc.date.accessioned2019-05-27T12:34:00Z
dc.date.available2019-05-27T12:34:00Z
dc.date.issued2003en_US
dc.departmentDepartment of Economicsen_US
dc.description.abstractThis paper studies money as working capital in a general equilibrium model. We argue that the way transactions are settled is the main determinant of the presence or lack of working capital in a cash-in-advance economy. In a production cycle, if the wage payments are made before sales proceeds are collected, firms have a financing need. This need alone brings, in a long run equilibrium, a deviation of real wages from marginal product of labor due to a ‘working capital premium’ in output prices. In contrast, if sales revenues can be collected before production costs are paid, then the working capital premium vanishes. These results are obtained in an economy with borrowing constraints, full equity financing, and optimal dividend policy.en_US
dc.identifier.doi10.1007/978-3-662-05611-0_18en_US
dc.identifier.eisbn9783662056110
dc.identifier.isbn9783642055416
dc.identifier.urihttp://hdl.handle.net/11693/51911
dc.language.isoEnglishen_US
dc.publisherSpringeren_US
dc.relation.ispartofAdvances in economic designen_US
dc.relation.ispartofseriesStudies in Economic Design;
dc.relation.isversionofhttps://doi.org/10.1007/978-3-662-05611-0_18en_US
dc.relation.isversionofhttps://doi.org/10.1007/978-3-662-05611-0en_US
dc.subjectWorking capital premiumen_US
dc.subjectFiat moneyen_US
dc.subjectCash-in-advanceen_US
dc.subjectLimited participationen_US
dc.subjectEquity financingen_US
dc.subjectDividend policyen_US
dc.titleOn the importance of sequencing of markets in monetary economiesen_US
dc.typeBook Chapteren_US

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