In many developing countries, public patients offer payments to their doctors outside the official payment channels. We argue that the fundamental reason for these informal payments is that formal prices cannot fully differentiate patients’ various needs. We compare patient welfare and social efficiency when informal payments are allowed with the scenario when they are banned. Patient heterogen...

This analysis utilizes farm-level data to evaluate the extent to which U.S. farm program benefits, particularly direct payments, bring about distortions in production. The issue is important in WTO negotiations and in the debate over the distortionary effects of decoupled (“green-box”) payments. Our results suggest that the distortions brought about by AMTA payments, though statistically signif...

he use of real-time gross settlement (RTGS) systems for the settlement of large-value payments offers considerable advantages, the principal one being the elimination of the credit risk that can arise between participants in deferred net settlement systems. However, in comparison with deferred net settlement systems, RTGS systems require relatively large amounts of liquidity to support payment ...

It is a pleasure to be with you this morning and to add my welcome to this very important conference on the payments system being hosted by the Federal Reserve's Payments System Development Committee. The name of the conference--The Payments System in Transition--captures not only the state of the financial services that we all use to make payments, but also the expectations of many payments sy...

Prior studies have found that subjects prefer an improving sequence of income over a constant sequence, even if the constant sequence offers a larger present-discounted value. However, little is known about how these preferences vary with the size of the wage payments. In each of four studies, we find a positive relationship between the preference for increasing payments and the size of the pay...