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Active Intermediation In Overlapping Generations Economies With Production And Unsecured Debt, Mark Pingle, Leigh Tesfatsion Apr 1997

Active Intermediation In Overlapping Generations Economies With Production And Unsecured Debt, Mark Pingle, Leigh Tesfatsion

ISU Economic Report Series

It is well known that the first welfare theorem fails for the pure exchange^overlapping generations economy studied by Samuelson (1958) and for the private production overlapping generations economy studied by Diamond (1965). Tirole (1985) combines and extends the Samuelson and Diamond frameworks by permitting both unsecured debt and private pro duction and shows that the first welfare theorem stillfails to hold. This paper shows that the reason for this failure is that intermediation is niodelled as a purely passive coordination ac tivity implemented by a Walrasian Auctioneer.


Strengthening Ethics Within Agricultural Cooperatives, Paul Lasley, C. Phillip Baumel, Ronald E. Deiter, Pat Hipple Feb 1997

Strengthening Ethics Within Agricultural Cooperatives, Paul Lasley, C. Phillip Baumel, Ronald E. Deiter, Pat Hipple

ISU Economic Report Series

Ethical issues particularly related to the business ethics of day-to-day decision making within agricultural cooperatives are identified.

Ethical behavior builds trust which, in turn, sets a foundation for communication, commitment, loyalty, and cooperation.

Cooperatives are challenged to distinguish themselves from other organizations and to strengthen their competitive advantages by being leaders in developing and emphasizing ethical business behavior.

Cooperative leaders are presented with an analytical framework for determining the ethicality of their cooperative business decisions, which should help them to avoid potentially unethical and embarrassing positions and decisions.

Ethical versus moral versus legal behaviors are discussed.

Reasons why ethical behavior ...


Growth Uncertainty And Risksharing, Stefano G. Athanasoulis, Eric Van Wincoop Feb 1997

Growth Uncertainty And Risksharing, Stefano G. Athanasoulis, Eric Van Wincoop

ISU Economic Report Series

How large are potential benefits from global risksharing? In order to answer this question we propose a new methodology that is closely connected with the empirical growth literature. We obtain estimates of residual risk (growth uncertainty) at various horizons from regressions of country-specific growth in deviation from, world growth on a wide set of variables in the information set. Since this residual risk can be entirely hedged through risksharing, we use it to obtain a measure of the potential welfare gain'for' a representative country. We find that nations can reap very large benefits from, engaging in such risksharing arrangements.


The Significance Of The Market Portfolio, Stefano G. Athanasoulis, Robert J. Shiller Jan 1997

The Significance Of The Market Portfolio, Stefano G. Athanasoulis, Robert J. Shiller

ISU Economic Report Series

The "market portfolio," the portfolio of all endowments in the world, has great significance in the capital asset pricing model (CAPM) in finance. The Sharpe-Lintner CAPM characterization of optimal risk sharing implies that in equilibrium no one will be subject to a random shock that is not shared by everyone else. ^ Thus, the CAPM gives us the "mutual fund theorem," which asserts that only one risky portfolio need be available to individual investors, the mutual fund that holds the market portfolio. In this paper we seek further clarification of the significance of the market portfolio beyond the bounds of the ...