There has long been a minority view that providing people with cash is an effective way of combating poverty and economic insecurity while promoting livelihoods and work. The mainstream view has been that giving people money, without conditions or obligations, promotes idleness and dependency, while being unnecessarily costly. Better, they contend, would be to allocate the available money to sc...

This paper is an attempt to provide evidence on two questions: Why do companies sponsor art events, and where exactly does the money go? We analyse data collected on the revenue structure of cultural institutions in Berlin and Hamburg. This data set not only tells us where the money goes, it also allows us to draw conclusions with respect to donors' motives. We regress sponsorships received on ...

Wecharacterize the familyofnon-contestablebudget-monotone rules for the allocation of objects and money as those obtained by maximizing a min social welfare function among all non-contestable allocations. We provide three additional seemingly independent approaches to construct these rules. We present three applications of this characterization. First, we show that one can “rectify” any non-con...

Flexible Labor Supply Models Discrete-choice models of labor supply have become very popular for ex ante evaluations of policy reforms as they easily account for non-convex budget sets. We test the constraints imposed in practice on these models and suggest a fully flexible model that significantly improves fit. JEL Classification: H31, J22

Contrary to communitarian market criticism institutions relying on money and bidding can strengthen faculties of ‘self-governance’. Securing procedurally egalitarian bidding on the basis of declared monetary evaluations guarantees that all realized changes of a status quo are in an ‘objective’ (pecuniary) sense equally advantageous for all members of the community. We show how to use this idea ...

In this paper I analyze the impact of increasing government infrastructure investment by using existing large foreign exchange reserves in a fully optimizing model matching the Chinese economy. Even though the private investment falls in the nontradable sector, real expenditure and money balance decrease in the short run, the infrastructure investment greately enhances the efficiency and produc...

This paper examines a simple monetary optimizing model with sticky-prices. Two types of monetary policy rules are considered: constant money growth rules and interest-rate feedback (Taylor-type) rules. In the case of constant money growth rules, we show the existence of limit cycles through the Hopf bifurcation theorem. On the other hand, in the case of the interest-rate feedback rules, we show...

Consumers make transactions of different sizes over time. This paper shows that this fact, together with transaction costs of various assets, can help in developing a theory of liquidity. Assets with different cost structures are used to purchase different sizes of transactions. This can explain the demand for money itself, the precautionary demand for money, and the demand for cash and demand ...

A new theory of coexistence of money and higher-return assets is set out. It applies to any setting in which some trade involves an exchange of goods for assets and occurs between two people–a buyer and a seller. We show that there exists a function mapping the portfolios of the buyer and the seller to the trade that occurs such that (i) the trade is in the buyer-seller core and (ii) some peopl...

Prior research debates focus on whether investors are smart enough to invest in funds that subsequently outperform. This paper documents a robust smart money effect among small fund investors who invest in the top performing funds, even after controlling for the momentum factor argued by Sapp and Tiwari (2004). I further explore the reason for the smart money effect and find that such outperfor...