In a simple stochastic overlapping generation model, individuals work when young and retire when old, generations’ productivity is affected by a serially uncorrelated random shock, and fiat money and nominal public debt are the only storable assets. In this setting, we show that social security programs featured by a constant contribution rate and budget-balance in each period, as common in the...

In this work, we apply a common economic tool, namely money, to coordinate network packets. In particular, we present a network economy, called PacketEconomy, where each flow is modeled as a population of rational network packets, and these packets can selfregulate their access to network resources by mutually trading their positions in router queues. Every packet of the economy has its price, ...

This essay makes the case that current debates about ‘moneyness’ of Bitcoin and other cryptocurrencies are occurring at incorrect scale. Rather than being some form trans-national digital money to be used alongside or compete with national fiat currencies, I argue that, instead, each cryptocurrency represents its own self-contained ‘money-world’. Put differently, a is uniquely specified unit ac...

According to the logic of the Friedman rule, the opportunity cost of holding money faced by private agents should equal the social cost of creating additional fiat money. Thus nominal rates of interest should be zero. This logic has been shown to be correct in a number of contexts, with and without various distortions. In practice, however, economies that have confronted very low nominal rates ...

This paper re-examines the so-called coexistence puzzle in terms of a modified version of the legal restrictions hypothesis initially put forth by Bryant and Wallace (1980). The modification is in terms of dropping a questionable assumption in the original hypothesis; i.e., that large denomination government bonds cannot be intermediated by private banks. This restriction is replaced by one tha...

The effective monetary sovereignty of a state is the ability to use instruments achieve its economic policy objectives. This notion goes beyond conceptualisation traditional Westphalian interference-free discretion, which necessary because hierarchical operational complexity fiat and credit money systems in modern financial system. At same time, challenges 21st century may also erode states, ca...

In the standard simple overlapping generations model with production (Diamond (1965)), the steady state competitive equilibrium level of capital under laissez-faire does not typically maximize the net production if the agents can save only in terms of capital. In particular, whenever the steady state competitive equilibrium level of capital is too high, net production and consumption can be inc...