The role of interbank markets in monetary policy: A model with rationing

This paper analyses the impact of asymmetric information in the interbankmarket and establishes its crucial role in the microfoundations of the monetarypolicy transmission mechanism. We show that interbank market imperfectionsinduce an equilibrium with rationing in the credit market. This has two majorimplications: first, it reconciles the irresponsiveness of business investment to theuser cost of capital with the large impact of monetary policy (magnitude effect)and, second, it shows that banks liquidity positions condition their reaction tomonetary policy (Kashyap and Stein liquidity effect).

Enforcement problems and secondary markets

There is a large and growing literature that studies the effects of weak enforcement institutions on economic performance. This literature has focused almost exclusively on primary markets, in which assets are issued and traded to improve the allocation of investment and consumption. The general conclusion is that weak enforcement institutions impair the workings of these markets, giving rise to various inefficiencies.But weak enforcement institutions also create incentives to develop secondary markets, in which the assets issued in primary markets are retraded. This paper shows that trading in secondary markets counteracts the effects of weak enforcement institutions and, in the absence of further frictions, restores efficiency.

Prime property institutions for a subprime era: Toward innovative models of homeownership

This Article breaks new ground toward contractual and institutional innovation in models of homeownership, equity building, and mortgage enforcement. Inspired by recent developments in the affordable housing sector and other types of public financing schemes, we suggest extending institutional and financial strategies such as time- and place-based division of property rights, conditional subsidies, and credit mediation to alleviate the systemic risks of mortgage foreclosure. Two new solutions offer a broad theoretical basis for such developments in the economic and legal institution of homeownership: a for-profit shared equity scheme led by local governments alongside a private market shared equity model, one of "bootstrapping home buying with purchase options".

Secret information acquisition in Cournot markets

Two-stage game models of information acquisition in stochastic oligopoliesrequire the unrealistic assumption that firms observe the precision ofinformation chosen by their competitors before determining quantities. Thispaper analyzes secret information acquisition as a one-stage game. Relativeto the two-stage game firms are shown to acquire less information. Policyimplications based on the two-stage game yield, therefore, too high taxes ortoo low subsidies for research activities. For the case of heterogeneousduopoly it is shown that comparative statics results partly depend on theobservability assumption.

Incomplete markets, labor supply and capital accumulation

In this paper we explore the accumulation of capital in the presence oflimited insurance against idiosyncratic shocks, borrowing constraintsand endogenous labor supply. As in the exogenous labor supply case(e.g. Aiyagari 1994, Huggett 1997), we find that steady states arecharacterized with an interest rate smaller than the rate of timepreference. However,wealsofind that when labor supply is endogenous thepresence of uncertainty and a borrowing limit are not enough to giverise to aggregate precautionary savings .

Property titling and conveyancing

This chapter analyzes titling institutions and the regulation of supporting conveyancingservices. After examining the tradeoff of enforcement benefits and consent costs posed byproperty rights, it explains how different public titling systems (privacy, recording andregistration) try to solve this tradeoff, and what the consequences are for the nature andregulation of private conveyancing services. The chapter ends with a discussion of someempirical issues and data which are useful for comparing, designing and managing titlingand conveyancing systems.

Property enforcement as organized consent

This article develops and tests a theory of the institutions that makeproperty rights viable, ensuring their enforcement, mobilizing thecollateral value of assets and promoting growth. In contrast tocontractual rights, property rights are enforced in rem, being affectedonly with the consent of the right holder. This ensures enforcement butis costly when multiple, potentially colliding rights are held in thesame asset. Different institutions reduce the cost of gathering consentsto overcome this trade-off of enforcement benefits for consent costs:recording of deeds with title insurance, registration of rights and evena regimen of purely private transactions. All three provide functionallysimilar services, but their relative performance varies with the numberof transactions, the risk of political opportunism and regulatoryconsistency. The analysis also shows the rationality of allowingcompetition in the preparation and support of private contractswhile requiring territorial monopoly in recording and registrationactivities, this to ensure independence and protect third parties.

On the throughput-WIP trade-off in queueing systems, diminishing returns and the threshold property: A linear programming approach

We present a new unifying framework for investigating throughput-WIP(Work-in-Process) optimal control problems in queueing systems,based on reformulating them as linear programming (LP) problems withspecial structure: We show that if a throughput-WIP performance pairin a stochastic system satisfies the Threshold Property we introducein this paper, then we can reformulate the problem of optimizing alinear objective of throughput-WIP performance as a (semi-infinite)LP problem over a polygon with special structure (a thresholdpolygon). The strong structural properties of such polygones explainthe optimality of threshold policies for optimizing linearperformance objectives: their vertices correspond to the performancepairs of threshold policies. We analyze in this framework theversatile input-output queueing intensity control model introduced byChen and Yao (1990), obtaining a variety of new results, including (a)an exact reformulation of the control problem as an LP problem over athreshold polygon; (b) an analytical characterization of the Min WIPfunction (giving the minimum WIP level required to attain a targetthroughput level); (c) an LP Value Decomposition Theorem that relatesthe objective value under an arbitrary policy with that of a giventhreshold policy (thus revealing the LP interpretation of Chen andYao's optimality conditions); (d) diminishing returns and invarianceproperties of throughput-WIP performance, which underlie thresholdoptimality; (e) a unified treatment of the time-discounted andtime-average cases.

Sovereign risk and secondary markets

Conventional wisdom views the problem of sovereign risk as one of insufficient penalties.Foreign creditors can only be repaid if the government enforces foreign debts. And this will onlyhappen if foreign creditors can effectively use the threat of imposing penalties to the country.Guided by this assessment of the problem, policy prescriptions to reduce sovereign risk havefocused on providing incentives for governments to enforce foreign debts. For instance, countriesmight want to favor increased trade ties and other forms of foreign dependence that make themvulnerable to foreign retaliation thereby increasing the costs of default penalties.

2008 Iowa Real Property Appraisal Manual, May 2008

********NOTE: There are nine sections to this manual, all in separate files.************* **********NOTE: Large files may take longer to open******** The basis of real property assessment in Iowa is market value as defined in Iowa Code §441.21. Iowa Code §§ 421.17(17) and 441.21(h) provide that assessment jurisdictions follow the guidelines and rules in this manual to help achieve uniformity in assessments. Assessors are encouraged to use the International Association of Assessing Officers’ Standard on Mass Appraisal of Real Property in their mass appraisal practices. Estimating market value in mass appraisal involves accurately listing properties, developing a sales file that includes the primary influences on market value, and developing models for subsets of properties that share common market influences using recognized mass appraisal techniques. The assessment of an individual property should not be based solely on the sale price. The Uniform Standards of Professional Appraisal Practice (USPAP) standard 6 says “In developing a mass appraisal, an appraiser must be aware of, understand, and correctly employ those recognized methods and techniques necessary to produce and communicate credible mass appraisals.” Accurate listing of property is the basis of a good mass appraisal program. On-site inspection and listing of property is essential in developing a good data base for revaluation. A physical review, including an on-site verification of property characteristics, should be conducted at least every four to six years. Land values should be reviewed every two years. Factors influencing the market of each property type should be identified and collected so that these factors can be considered in the mass appraisal model. It is equally important to maintain the data once it is collected. Accessing local government permit systems should be a part of a good data maintenance program along with an inspection program. Current cadastral maps and geographical information systems (GIS) are tools that are integral in checking accuracy of listings and maintaining a comprehensive data base.

How enforcement institutions affect markets

In an experiment we study market outcomes under alternative incentive structures for third-party enforcers. Our transactions resemble an anonymous credit market where lenders can give loans and borrowers can repay them. When borrowers default, judges are free to enforce repayment but are themselves paid differently in each of three treatments. First, paying judges according to lenders votes maximizes surplus and the equality of earnings. In contrast, paying judges according to borrowers votes triggers insufficient enforcement, destroying the market and producing the lowest surplus and the most unequal distribution of earnings. Lastly, judges paid the average earnings of borrowers and lenders achieve results close to those based on lender voting. We employ a steps-of-reasoning argument to interpret the performances of different institutions. When voting and enforcement rights are allocated to different classes of actors, the difficulty of their task changes, and arguably as a consequence they focus on high or low surplus equilibria.

Stabilization versus insurance: Welfare effects of procyclical taxation under incomplete markets

We construct and calibrate a general equilibrium business cycle model with unemployment and precautionary saving. We compute the cost of business cycles and locate the optimum in a set of simple cyclical fiscal policies. Our economy exhibits productivity shocks, giving firms an incentive to hire more when productivity is high. However, business cycles make workers' income riskier, both by increasing the unconditional probability of unusuallylong unemployment spells, and by making wages more variable, and therefore they decrease social welfare by around one-fourth or one-third of 1% of consumption. Optimal fiscal policy offsets the cycle, holding unemployment benefits constant but varying the tax rate procyclically to smooth hiring. By running a deficit of 4% to 5% of output in recessions, the government eliminates half the variation in the unemployment rate, most of the variation in workers'aggregate consumption, and most of the welfare cost of business cycles.

Effect of irrigation water on the incidence of Salmonella spp. on lettuces produced by urban agriculture and sold on the markets in Dakar, Senegal

The aim of our survey was to assess the effect of irrigation water of the microbiological quality on the production chain of lettuce in the Dakar area. Microbiological analysis showed that 35% of irrigation water was contaminated by Salmonella spp. between the two water-types used for irrigation (groundwater and wastewater), no significant difference (p>0.05) in their degree of contamination was found. The incidence of different types of irrigation water on the contamination rate of lettuces from the farm (Pikine and Patte d'Oie) was not different either (p>0.05). However, the contamination rate of lettuce from markets of Dalifort and Grand-Yoff that were supplied by the area of Patte d'Oie was greater than those of Sham and Zinc supplied by Pikine (p<0.05). Comparison of serotypes of Salmonella isolated from irrigation water and lettuce showed that irrigation water may affect the microbiological quality of lettuce. Manures, frequently used as organic amendment in cultivating lettuce are another potential source of contamination. These results showed that lettuce may constitute effective vectors for the transmission of pathogens to consumers. Extensive treatment of the used wastewater and/or composting of manure could considerably reduce these risks.

Implications of dynamic trading for insurance markets

We study the interaction between insurance and capital markets within singlebut general framework.We show that capital markets greatly enhance the risksharing capacity of insurance markets and the scope of risks that areinsurable because efficiency does not depend on the number of agents atrisk, nor on risks being independent, nor on the preferences and endowmentsof agents at risk being the same. We show that agents share risks by buyingfull coverage for their individual risks and provide insurance capitalthrough stock markets.We show that aggregate risk enters private insuranceas positive loading on insurance prices and despite that agents will buyfull coverage. The loading is determined by the risk premium of investorsin the stock market and hence does not depend on the agent s willingnessto pay. Agents provide insurance capital by trading an equally weightedportfolio of insurance company shares and riskless asset. We are able toconstruct agents optimal trading strategies explicitly and for verygeneral preferences.