We examine the effect of introducing credit default swaps (CDSs) on firms’ investment and financing policies. Our model allows for dynamic investment and dynamic financing using equity and debt, and debt holders can trade in the CDS market. After calibrating the model, we compare an economy with a CDS market to an economy without one. The model contains both positive and negative effects of CDS...

This study ofers another perspective to the injlationary trend in Nigeria that incorporates monetarist, open economy and structural features of the economy. The main argument is that variation in the parallel market exchange rate was one of the determinants qfprice level behavior in Nigeria durittg the period, 1971 I 995. A partial equilibrium model based on micro,foundations is solved for the ...

As Grids are emerging as the next generation service-oriented computing platforms, they need to support Grid economy that helps in the management of supply and demand for resources and offers an economic incentive for Grid resource providers. To enable this Grid economy, a market-like Grid environment including an infrastructure that supports the publication of services and their discovery is n...

I present a model where firms and workers set wages above the market-clearing level. Unemployment is thus generated by their exercise of market power. Because both the labor and product markets are imperfectly competitive, market power in the labor market interacts with market power in the product market. This interaction sheds new light on the effects of policy interventions on unemployment an...

To prove their Walrasian equilibrium existence theorem, Arrow and Debreu (1954) devised an abstract economy that Shapley and Shubik (1977) cricitized as a market game because, especially with untrustworthy traders, it fails to determine a credible outcome away from equilibrium. All this earlier work also postulated a Walrasian auctioneer with complete information about traders’ preferences and ...

We study a dynamic, stochastic economy with several agents, who may differ in their endowments (of a single commodity) and in their utilities. An equilibrium financial market is constructed, under the condition that all agents have infinite marginal utility at zero. If, in addition, the Arrow—Pratt indices of relative risk aversion for all agents are less than or equal to one, then uniqueness o...

We address problems of debt, virtuality, and destructive feedback in the Russian economy. Official data fails to reflect reality. Much of the advice by reformers was flawed in that it ignored the importance of market. A positive feedback cycle of arrears, barter, and non-competitiveness evolved. Feedback systems are critical to market economies generally. Contagion from Asia was merely the trig...

Information construction in rural area, which is crucial factor in pushing forward rural economy, even for agriculture, rural economy, and farmer in present China, consists of three phases: preliminary phase, development phase, and mature phase. To identify the growth phase of information construction in rural area is essential to assessment it. The paper analyzes the characteristics of each gr...