Is Cash Important? An Experimental Method

A workforce of economists at Financial institution of Canada ( Janet Hua Jiang, Peter Norman, Daniela Puzzello, Bruno Sultanum, Randall Wright) in this paper:

Financial change is deemed important when higher incentive-compatible outcomes might be achieved with cash than with out it. We research essentiality each theoretically and experimentally, utilizing finite-horizon financial fashions which might be naturally suited to the lab. We additionally observe the mechanism design strategy and research the consequences of technique suggestions, each when they’re incentive-compatible and when they aren’t. Outcomes present that output and welfare are considerably enhanced by fiat forex when financial equilibrium exists. Additionally, suggestions assist if they’re incentive-compatible however not a lot in any other case. Generally cash is used when it shouldn’t be and we examine why, utilizing surveys and measures of social preferences.

This entry was posted on August 17, 2023 at 12:10 pm and is filed beneath Academic research & research papers, Central Banks / Monetary Policy, Economics – macro, micro etc, Financial Markets/ Finance. You may observe any responses to this entry via the RSS 2.0 feed.
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