Supply curve should be created from buyers’ view, and demand curve should be created from sellers’ view. Producers are joints of supply and demand, not products. Producers make their decisions based on average profits, not marginal profits. Producers will tolerate lower profit rate in a stable market than in a fluctuate market, which leads to lower unemployment. This is the value of stability.
{"title":"The Logic of Market and the Value of Stability","authors":"Yirui Wang","doi":"10.2139/ssrn.3500598","DOIUrl":"https://doi.org/10.2139/ssrn.3500598","url":null,"abstract":"Supply curve should be created from buyers’ view, and demand curve should be created from sellers’ view. Producers are joints of supply and demand, not products. Producers make their decisions based on average profits, not marginal profits. Producers will tolerate lower profit rate in a stable market than in a fluctuate market, which leads to lower unemployment. This is the value of stability.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74329249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-03-01DOI: 10.21799/FRBP.WP.2019.20
H. Banzhaf, Kyle Mangum
This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a ticket" price paid regardless of the amount of housing service consumed and a slope" price paid per unit of services. We first show theoretically how tickets arise as an extensi ve margin price when there are binding constraints on the number of households admitted to a neighborhood. We use a large national dataset of housing transactions, property characte ristics, and neighbor- hood attributes to measure the extent to which local amenities are capitalized in ticket prices vis-a-vis slopes. We find that in most U.S. cities, the majori ty of neighborhood variation in pricing occurs via tickets, although the importance of tickets rises sharply in the stringency of land development regulations, as predicted by theor y. We discuss implications of two-part pricing for efficiency and equity in neighborhood sorting equilibria and for empirical estimates of willingness to pay for non-marketed amenit ies, which generally assume proportional pricing only.
{"title":"Capitalization as a Two-Part Tariff: The Role of Zoning","authors":"H. Banzhaf, Kyle Mangum","doi":"10.21799/FRBP.WP.2019.20","DOIUrl":"https://doi.org/10.21799/FRBP.WP.2019.20","url":null,"abstract":"This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a ticket\" price paid regardless of the amount of housing service consumed and a slope\" price paid per unit of services. We first show theoretically how tickets arise as an extensi ve margin price when there are binding constraints on the number of households admitted to a neighborhood. We use a large national dataset of housing transactions, property characte ristics, and neighbor- hood attributes to measure the extent to which local amenities are capitalized in ticket prices vis-a-vis slopes. We find that in most U.S. cities, the majori ty of neighborhood variation in pricing occurs via tickets, although the importance of tickets rises sharply in the stringency of land development regulations, as predicted by theor y. We discuss implications of two-part pricing for efficiency and equity in neighborhood sorting equilibria and for empirical estimates of willingness to pay for non-marketed amenit ies, which generally assume proportional pricing only.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82044153","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Chinese Abstract: 在中国“一带一路”政策推进过程中，促进沿线国家基础设施建设是中国对外经济贸易政策重点。与此同时，因基础设施建设项目导致的贸易便利化程度改善也增进了中国与“一带一路”沿线国家的贸易往来和经济联系。本文将采用全球可计算一般均衡模型，模拟量化“一带一路”基础设施项目发展对沿线国家带来的经济影响。模型根据贸易便利化所带来的贸易时间成本减少转化为等值关税，并以此作为政策冲击量化依据设置不同的模拟情景。模拟结果表明，在贸易便利化程度优化前提下，包括中国在内的“一带一路”沿线国家经济都呈现正增长，但美国、日本、韩国则由于“一带一路”区域贸易战略的实施导致贸易转移，GDP出现不同程度下降。中国建造业、金属产品、钢铁、运输工具以及机械设备等与基础设施建设密切相关的行业部门产出也出现增长。
English Abstract: Infrastructure development is one of the strategic initiatives of China’s “Belt and Road” strategy. At the same time, the improvement of trade facilitation resulted from infrastructure development has also strengthened China’s trade and economic connections with “Belt and Road” countries. This article uses global computable general equilibrium (CGE) model to quantify the economic impact of infrastructure development on “Belt and Road” countries. The model transfers the “shock” of trade facilitation into the reduction of tariffs and sets two simulation scenarios. The result shows that the improvement of trade facilitation will lead to positive economic growth of the “Belt and Road” countries. Otherwise, GDP in the US, Japan and Korea will decrease because of the effect of trade transfer to “Belt and Countries” countries. In China, the output of infrastructure-related sectors, including construction, metal products, ferrous, vehicle and mechanical equipment, will increase.
Chinese Abstract: 在中国“一带一路”政策推进过程中，促进沿线国家基础设施建设是中国对外经济贸易政策重点。与此同时，因基础设施建设项目导致的贸易便利化程度改善也增进了中国与“一带一路”沿线国家的贸易往来和经济联系。本文将采用全球可计算一般均衡模型，模拟量化“一带一路”基础设施项目发展对沿线国家带来的经济影响。模型根据贸易便利化所带来的贸易时间成本减少转化为等值关税，并以此作为政策冲击量化依据设置不同的模拟情景。模拟结果表明，在贸易便利化程度优化前提下，包括中国在内的“一带一路”沿线国家经济都呈现正增长，但美国、日本、韩国则由于“一带一路”区域贸易战略的实施导致贸易转移，GDP出现不同程度下降。中国建造业、金属产品、钢铁、运输工具以及机械设备等与基础设施建设密切相关的行业部门产出也出现增长。English Abstract: Infrastructure development is one of the strategic initiatives of China’s “Belt and Road” strategy. At the same time, the improvement of trade facilitation resulted from infrastructure development has also strengthened China’s trade and economic connections with “Belt and Road” countries. This article uses global computable general equilibrium (CGE) model to quantify the economic impact of infrastructure development on “Belt and Road” countries. The model transfers the “shock” of trade facilitation into the reduction of tariffs and sets two simulation scenarios. The result shows that the improvement of trade facilitation will lead to positive economic growth of the “Belt and Road” countries. Otherwise, GDP in the US, Japan and Korea will decrease because of the effect of trade transfer to “Belt and Countries” countries. In China, the output of infrastructure-related sectors, including construction, metal products, ferrous, vehicle and mechanical equipment, will increase.
{"title":"“一带一路”基础设施发展对贸易成本冲击影响分析 (Economic Impact of Infrastructure Development on the 'Belt and Road' Countries）","authors":"Y. Wen, Y. Lyu","doi":"10.2139/ssrn.3416935","DOIUrl":"https://doi.org/10.2139/ssrn.3416935","url":null,"abstract":"<b>Chinese Abstract:</b> 在中国“一带一路”政策推进过程中，促进沿线国家基础设施建设是中国对外经济贸易政策重点。与此同时，因基础设施建设项目导致的贸易便利化程度改善也增进了中国与“一带一路”沿线国家的贸易往来和经济联系。本文将采用全球可计算一般均衡模型，模拟量化“一带一路”基础设施项目发展对沿线国家带来的经济影响。模型根据贸易便利化所带来的贸易时间成本减少转化为等值关税，并以此作为政策冲击量化依据设置不同的模拟情景。模拟结果表明，在贸易便利化程度优化前提下，包括中国在内的“一带一路”沿线国家经济都呈现正增长，但美国、日本、韩国则由于“一带一路”区域贸易战略的实施导致贸易转移，GDP出现不同程度下降。中国建造业、金属产品、钢铁、运输工具以及机械设备等与基础设施建设密切相关的行业部门产出也出现增长。<br><br><b>English Abstract:</b> Infrastructure development is one of the strategic initiatives of China’s “Belt and Road” strategy. At the same time, the improvement of trade facilitation resulted from infrastructure development has also strengthened China’s trade and economic connections with “Belt and Road” countries. This article uses global computable general equilibrium (CGE) model to quantify the economic impact of infrastructure development on “Belt and Road” countries. The model transfers the “shock” of trade facilitation into the reduction of tariffs and sets two simulation scenarios. The result shows that the improvement of trade facilitation will lead to positive economic growth of the “Belt and Road” countries. Otherwise, GDP in the US, Japan and Korea will decrease because of the effect of trade transfer to “Belt and Countries” countries. In China, the output of infrastructure-related sectors, including construction, metal products, ferrous, vehicle and mechanical equipment, will increase.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85486184","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine how investors arbitrage the Bitcoin spot and futures markets. Using intraday data of the Chicago Board Options Exchange (CBOE), we reconstruct the actual arbitrage condition that investors confront. We find that there are few arbitrage profit opportunities in “normal” markets, but large arbitrage profit opportunities arise during Bitcoin market “crashes".
{"title":"The Relationship Between Arbitrage in Futures and Spot Markets and Bitcoin Price Movements: Evidence From the Bitcoin Markets","authors":"Takahiro Hattori, Ryo Ishida","doi":"10.2139/ssrn.3209625","DOIUrl":"https://doi.org/10.2139/ssrn.3209625","url":null,"abstract":"We examine how investors arbitrage the Bitcoin spot and futures markets. Using intraday data of the Chicago Board Options Exchange (CBOE), we reconstruct the actual arbitrage condition that investors confront. We find that there are few arbitrage profit opportunities in “normal” markets, but large arbitrage profit opportunities arise during Bitcoin market “crashes\".","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80676977","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-28DOI: 10.1016/J.JBANKFIN.2018.12.014
Marcel Fischer, B. A. Jensen
{"title":"The Debt Tax Shield in General Equilibrium","authors":"Marcel Fischer, B. A. Jensen","doi":"10.1016/J.JBANKFIN.2018.12.014","DOIUrl":"https://doi.org/10.1016/J.JBANKFIN.2018.12.014","url":null,"abstract":"","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84098927","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Centralized matching mechanisms and decentralized markets have been widely studied to allocate indivisible objects. However, they have been analyzed separately. The present paper proposes a new framework, by explicitly formulating a two-stage model where objects are allocated through a matching mechanism in the first stage and traded in the second stage market. In addition, one divisible good called money may or may not be available in the market. Every player demands at most one unit of object besides money. The players may face different priorities at each object type in the first stage. Each object type has a limited amount of capacity, called quota. Each player has a quasi-linear utility function. The present analysis sets forth the equivalence conditions under which stability and efficiency are attained in equilibrium.
{"title":"A Two-Stage Model of Assignment and Market","authors":"A. Matsui, Megumi Murakami","doi":"10.2139/ssrn.3020547","DOIUrl":"https://doi.org/10.2139/ssrn.3020547","url":null,"abstract":"Centralized matching mechanisms and decentralized markets have been widely studied to allocate indivisible objects. However, they have been analyzed separately. The present paper proposes a new framework, by explicitly formulating a two-stage model where objects are allocated through a matching mechanism in the first stage and traded in the second stage market. In addition, one divisible good called money may or may not be available in the market. Every player demands at most one unit of object besides money. The players may face different priorities at each object type in the first stage. Each object type has a limited amount of capacity, called quota. Each player has a quasi-linear utility function. The present analysis sets forth the equivalence conditions under which stability and efficiency are attained in equilibrium.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87639503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-10DOI: 10.1016/J.ECONLET.2019.01.005
Ryusuke Shinohara
{"title":"Undominated Coalition-Proof Nash Equilibria in Quasi-Supermodular Games with Monotonic Externalities","authors":"Ryusuke Shinohara","doi":"10.1016/J.ECONLET.2019.01.005","DOIUrl":"https://doi.org/10.1016/J.ECONLET.2019.01.005","url":null,"abstract":"","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80434317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses a one period model to establish a connection between the complexity of informational environment, market efficiency, and volume. Introducing a high-dimensional estimation problem into a typical trading game, we show why agents may not condition on price in their demand curve submissions, and come to possess heterogeneous models. We define a new equilibrium concept, the “rational statisticians’ equilibrium,” wherein each agent uses only a ridge regression estimator on her own data to forecast the fundamental’s distribution. We derive quantitative properties of price informativeness and volume in these equilibria, introducing the notion of a “regularization externality” in price formation and accounting for volume spikes around earnings.
{"title":"Statisticians' Equilibrium: Trading with High-Dimensional Data","authors":"A. Balasubramanian, Y. Yang","doi":"10.2139/ssrn.3583217","DOIUrl":"https://doi.org/10.2139/ssrn.3583217","url":null,"abstract":"This paper uses a one period model to establish a connection between the complexity of informational environment, market efficiency, and volume. Introducing a high-dimensional estimation problem into a typical trading game, we show why agents may not condition on price in their demand curve submissions, and come to possess heterogeneous models. We define a new equilibrium concept, the “rational statisticians’ equilibrium,” wherein each agent uses only a ridge regression estimator on her own data to forecast the fundamental’s distribution. We derive quantitative properties of price informativeness and volume in these equilibria, introducing the notion of a “regularization externality” in price formation and accounting for volume spikes around earnings.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80933402","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces an internal propagation mechanism into a baseline multi-sector RBC model. The proposed mechanism, which is very similar to Keynes' spending multiplier in spirit, amplifies the impact of exogenous shocks significantly - a long-standing quest in the RBC literature. The main motivation for the mechanism is the following: the composition of consumption expenditures shows sizable cross-sectional differences across the population as a function of income and these differences determine the direction towards which people update their consumption bundle as their income change. In the paper, these observations are modeled through two types of agents (L and H-skill) who differ in terms of the occupations that they are specialized in and the composition of their consumption baskets. In addition, both types of agents have income dependent (non-homothetic) preferences which induce a strong desire to consume the good that the other type produces. To see how the resulting mechanism operates in response to a positive exogenous shock consider an innovator (H-skill) producing iPhones and a waiter (L-skill) producing dining services. A positive technology shock makes the innovator more productive and raises her income and with the additional income, she purchases relatively more dining services. This, in turn, raises the waiter's income as the demand for her labor services increases and with the additional income, she purchases a new iPhone, which creates further incentive for the innovator to work more. Importantly this second round work incentive for the innovator is not directly related to the original technology shock but to the demand from the waiter and that is exactly why the model generates significantly more amplification compare to other comparable RBC models.
{"title":"The Composition of Aggregate Demand, Division of Labor and the Business Cycle","authors":"Ercan Karadaş","doi":"10.2139/ssrn.3324722","DOIUrl":"https://doi.org/10.2139/ssrn.3324722","url":null,"abstract":"This paper introduces an internal propagation mechanism into a baseline multi-sector RBC model. The proposed mechanism, which is very similar to Keynes' spending multiplier in spirit, amplifies the impact of exogenous shocks significantly - a long-standing quest in the RBC literature. The main motivation for the mechanism is the following: the composition of consumption expenditures shows sizable cross-sectional differences across the population as a function of income and these differences determine the direction towards which people update their consumption bundle as their income change. In the paper, these observations are modeled through two types of agents (L and H-skill) who differ in terms of the occupations that they are specialized in and the composition of their consumption baskets. In addition, both types of agents have income dependent (non-homothetic) preferences which induce a strong desire to consume the good that the other type produces. To see how the resulting mechanism operates in response to a positive exogenous shock consider an innovator (H-skill) producing iPhones and a waiter (L-skill) producing dining services. A positive technology shock makes the innovator more productive and raises her income and with the additional income, she purchases relatively more dining services. This, in turn, raises the waiter's income as the demand for her labor services increases and with the additional income, she purchases a new iPhone, which creates further incentive for the innovator to work more. Importantly this second round work incentive for the innovator is not directly related to the original technology shock but to the demand from the waiter and that is exactly why the model generates significantly more amplification compare to other comparable RBC models.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86442202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we propose a novel—and general‐purpose—modeling approach. We give a linear representation of the spatial general equilibrium, expressed in terms of local percentage deviations from the benchmark case of symmetry, where all the areas in the economy are taken to be initially identical. To illustrate the flexibility of our approach, we revisit the literature on the spatial heterogeneity of local skill premia and local skill mix. We show that our approach is able to encompass a variety of alternative explanations in a simple “unifying framework.” Finally, we exploit a graphical version of the model to show how to implement empirical tests.
{"title":"Spatial Equilibrium in Deviations: An Application to Skill‐Premium and Skill‐Mix Heterogeneity","authors":"Antonio Accetturo, A. Dalmazzo, G. Blasio","doi":"10.1111/jors.12418","DOIUrl":"https://doi.org/10.1111/jors.12418","url":null,"abstract":"In this paper, we propose a novel—and general‐purpose—modeling approach. We give a linear representation of the spatial general equilibrium, expressed in terms of local percentage deviations from the benchmark case of symmetry, where all the areas in the economy are taken to be initially identical. To illustrate the flexibility of our approach, we revisit the literature on the spatial heterogeneity of local skill premia and local skill mix. We show that our approach is able to encompass a variety of alternative explanations in a simple “unifying framework.” Finally, we exploit a graphical version of the model to show how to implement empirical tests.","PeriodicalId":11757,"journal":{"name":"ERN: Other Microeconomics: General Equilibrium & Disequilibrium Models of Financial Markets (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77233270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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