Mechanism Design and the Role of Enforcement in Freeman's Model of Payments

B-Tier
Journal: Review of Economic Dynamics
Year: 2004
Volume: 7
Issue: 1
Pages: 219-236

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Freeman (1996a) is the first to formulate a model in which (i) debts are repaid with money and (ii) there can arise liquidity problems which give rise to a role for a central bank discount window. I ask whether this payment system is truly essential in his model. It is not because there is another mechanism - one which features (i) and (ii) - that works well. This is because of a strong assumption regarding the enforcement of debt contracts. I then present a slightly different model of enforcement based on collateralized lending where (i) is necessary, but (ii) is not. (Copyright: Elsevier)

Technical Details

RePEc Handle
repec:red:issued:v:7:y:2004:i:1:p:219-236
Journal Field
Macro
Author Count
1
Added to Database
2026-01-26