Working Papers From 1996 - Federal Reserve Bank of Richmond

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1996 Working Papers

Stored Value Cards: Costly Private Substitutes for Government Currency

By Jeffrey M. Lacker
Working Paper 96-3
Released: April 1996

A model in which both currency and stored value cards are used to make payments is presented. I compare steady-state equilibria with and without stored value cards. Stored value cards are beneficial because they help alleviate the deadweight loss due...

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Theory of the Firm: Applied Mechanism Design

By Robert M. Townsend & Edward Simpson Prescott
Working Paper 96-2
Released: June 1996

This paper studies the question: Why are there Firms? Motivated by observations of a variety of economies, several distinct concepts of what it means to be a firm are identified and then analyzed with mechanism design models. In the first class of ...

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Stopping Inflations, Big and Small

By Peter N. Ireland
Working Paper 96-1
Released: February 1996

Previous studies of disinflation work with models in which firms use time-dependent strategies, changing nominal prices at intervals of fixed length. These models may be criticized for failing to allow pricing behavior to adjust after a large shift in...

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