Mathematical Institutional Economics and the Theory of Money and Financial Institutions

2016 ◽  
Author(s):  
Martin Shubik ◽  
Eric Smith
Keyword(s):  
Financial Institutions ◽  
Rational Expectations ◽  
Institutional Economics ◽  
Random Variable ◽  
Process Models ◽  
Modeling Methodology ◽  
Theory To Practice ◽  
The One ◽  
Simultaneous Move

Chapter 11 raises the question of what is meant by our usage of “theory”. Different disciplines utilize the word theory differently. Furthermore model and theory appear on occasion to be used interchangeably. Aristotle contrasted theory to practice. Praxis is the Greek term for doing. Mathematical theory is deductive. The sensory or empirical content is implicit in the axioms. The logical consequences of the axioms provide theorems. A semantic view stresses the connection between the axioms and the abstraction of some aspect of reality. We stress that the natural preliminary step before dynamics is to construct process models based on general equilibrium. This can be done utilizing single simultaneous move games. This is sufficient to show the critical roles of money and financial institutions without even having to discuss complication in information and behaviour. The evolution of money and many financial institutions does not even call for the presence of exogenous uncertainty. A single random variable is sufficient to illustrate innovation. We develop a general modeling methodology leading to the construction of models as playable games. Staying with the one move structure leads to describing a manageable number of minimal institutions (below 100). When we consider more moves and information the number of logically feasible and plausible institutions becomes hyperastronomical and we are forced into considering not merely structure but many variants of behaviour even within the simple scope of rational expectations. This problem is taken up in Chapter 12.

El Prestige: comparativa de los regímenes internacionales de responsabilidad civil

2019 ◽  
Vol 37 (3) ◽  
pp. 31
Author(s):  
Raquel Fernández González ◽  
Marcos Íñigo Pérez Pérez
Keyword(s):  
Institutional Economics ◽  
Geographical Area ◽  
New Institutional Economics ◽  
Rigorous Analysis ◽  
Judicial Process ◽  
Main Research ◽  
Civil Responsibility ◽  
The One ◽  
High Degree ◽  
The Prestige

The return of institutions to the main research agenda has highlighted the importance of rules in economic analysis. The New Institutional Economics has allowed a better understanding of the case studies that concern different areas of knowledge, also the one concerning the management of natural resources. In this article, the institutional analysis focuses on the maritime domain, where two large civil liability regimes for pollution coexist (OPA 90-IMO), each in a different geographical area (United States - Europe). Therefore, a comparative analysis is made between the two large regimes of civil responsibility assignment applying them to the Prestige catastrophe. In this way, the allocation and distribution of responsibilities in the investigation and subsequent judicial process of the Prestige is compared with an alternative scenario in which the applicable compensation instruments are governed by the provisions of the Oil Polution Act of 1990 (OPA 90), in order to establish a rigorous analysis on the effects that the different norms can have in the same scenario. In the comparative established in the case of the Prestige, where the responsibilities were solved very slowly in a judicial process with high transaction costs, the application of rules governed by the OPA 90 would not count with such a high degree of imperfection. This is so, since by applying the preponderance of the evidence existing in OPA 90 there would be no mitigation for the presumed culprits. On the other hand, the agents involved in the sinking would not be limited only to the owner, but also that operators or shipowners would be responsible as well. In addition, the amount of compensation would increase when counting in the damage count the personal damages, the taxes without perceiving and the ecological damage caused in a broad sense, damages not computable in the IMO.

scholarly journals Fractional negative binomial and Pólya processes

2018 ◽  
Vol 38 (1) ◽  
pp. 77-101
Author(s):  
Palaniappan Vellai Samy ◽  
Aditya Maheshwari
Keyword(s):  
Poisson Process ◽  
Negative Binomial ◽  
Random Variable ◽  
Infinitely Divisible ◽  
One Dimensional ◽  
Fractional Poisson Process ◽  
Negative Binomial Process ◽  
The One ◽  
Definition Of ◽  
Binomial Process

In this paper, we define a fractional negative binomial process FNBP by replacing the Poisson process by a fractional Poisson process FPP in the gamma subordinated form of the negative binomial process. It is shown that the one-dimensional distributions of the FPP and the FNBP are not infinitely divisible. Also, the space fractional Pólya process SFPP is defined by replacing the rate parameter λ by a gamma random variable in the definition of the space fractional Poisson process. The properties of the FNBP and the SFPP and the connections to PDEs governing the density of the FNBP and the SFPP are also investigated.

scholarly journals Financial institutions performance evaluation in a unique developing market using TOPSIS approach

2017 ◽  
Vol 12 (1) ◽  
pp. 54-59 ◽  
Author(s):  
Sami Al Kharusi ◽  
Eşref Savaş Başci
Keyword(s):  
International Development ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Rank Order ◽  
Jel Classification ◽  
Investment Companies ◽  
Ideal Solutions ◽  
Topsis Approach ◽  
One Year ◽  
The One

Using Technique for Order Performance by Similarity to Ideal Solutions (TOPSIS) approach for the data from 2011 to 2015, the authors investigate the financial performance of 16 different financial institutions in Oman that include nine commercial banks, three specialized banks, two investment companies, and two finance companies. They find that the one investment company, Dhofar International Development and Investment Holding Co., was more efficient in 2015 and 2011. Moreover, Oman Housing Bank was more efficient in 2013 and 2014, while Ahli Bank was more efficient in the year 2012. In contrast, Bank Muscat that has the largest total assets was ranked number 16 for the years 2013, 2014 and 2015. As a result of Spearman’s Rho (Rank-Order) Correlation, all ranked results are related to other years. If a bank is at placement in level, it can be affected by year before or year after. But Oman banks’ correlations shows that there are 2 different periods as effecting one year to the other. Keywords: financial institutions performance, TOPSIS, emerging markets, efficiency, decision making criteria. JEL Classification: G21, G23, L25

Responsive Regulierung für den homo oeconomicus institutionalis – Ökonomische Verhaltenstheorie in der Verhältnismäßigkeitsprüfung

2001 ◽  
Author(s):  
Kilian Bizer ◽  
Martin Führ
Keyword(s):  
Economic Analysis ◽  
Institutional Economics ◽  
Behavioral Model ◽  
Legal Framework ◽  
Homo Oeconomicus ◽  
Starting Point ◽  
The Law ◽  
Principle Of Proportionality ◽  
The One ◽  
Analytical Tools

The starting point of the research project was the hypothesis that the "principle of proportionality", which is fundamental to law, is related to the "economic principle". The resulting methodological similarities were intended to enable a cross-disciplinary bridge to be built, which would allow the findings of economic analysis to be made fruitful for legal issues. This was practically tested in three study areas in order to be able to better classify the performance of the analytical tools. The foundations for interdisciplinary bridge building are found in the rational-choice paradigm. In both disciplines, this paradigm calls for an examination of the relationship between the purpose-means-relations: among the design options under consideration, the one must be selected that is expected to be as (freedom- or resource-) sparing as possible, in other words, the most "waste-free" solution to the control problem.The results of the economic analysis can thus be "translated" in such a way that, within the framework of "necessity", they support the search for control instruments that are equivalent to the objective but less disruptive. supports. The core of the positive economic analysis is the motivational situation of those actors whose behavior is to be influenced by a changed legal framework. In this context, the classical behavioral model of economics proved to be too limited. It therefore had to be developed further in line with the findings of research in institutional economics into homo oeconomicus institutionalis. This behavioral model takes into account not only the consequentialist, strictly situational utility orientation of the model person, but also other factors influencing behavior, including above all those that are institutionally mediated. If one takes the motivational situation of the actors as the starting point for policy-advising design recommendations, it becomes apparent that an understanding of governance dominated by imperative behavioral specifications leads to less favorable results, both in terms of the degree to which goals are achieved and in terms of the freedom-impairing effects, than a mixed-instrument approach oriented toward the model of "responsive regulation." According to this model, the law can no longer simply assume that those subject to the law will "obediently" execute the legal commands. It must ask itself what other factors determine behavior and under what boundary conditions changes can be expected in the direction of the desired behavior. For this reason, too, it must engage with the cognitive program of the behavioral sciences. This linkage opens up new perspectives for interdisciplinary research on the consequences of laws.

Monetary Transmission in the Term Structure of Interest Rates in Spain (1995-2003)

2021 ◽  
Vol 26 (1) ◽  
pp. 279-292
Author(s):  
María A. Prats ◽  
Gloria M. Soto
Keyword(s):  
Interest Rates ◽  
Term Structure ◽  
Rational Expectations ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Var Model ◽  
Expectations Hypothesis ◽  
Weak Evidence ◽  
One Year ◽  
The One

The aim of this paper is to investigate whether the effectiveness of the transmission mechanism of monetary  policy in Spain has changed since EMU establishment. The analysis is based on the fulfillment of the Expectations Hypothesis under rational expectations and the methodology is implemented through a  cointegrated  bivariate VAR model. The results reveal the existence of  monetary transmission in the term structure in the  period prior to EMU, even though the evidence is stronger up to the one-year rate. From 1999, the results are   only consistent with a weak evidence of monetary transmission.

Minimal Institutions: Game Theory and Gaming

2016 ◽  
Author(s):  
Martin Shubik ◽  
Eric Smith
Keyword(s):  
Game Theory ◽  
General Equilibrium ◽  
Institutional Economics ◽  
Price System ◽  
Process Models ◽  
Price Formation ◽  
Equilibrium System

The General Equilibrium system provides a pre-institutional modeling structure appropriate to studying many allocative properties of the price system. The economies we live in ere encompassed by their polities and societies. The task laid out here is to indicate how to build process models of the economy that are consistent with the General Equilibrium system, but build out in a systematic manner towards the multitude of institutions that are the carriers of process in an ongoing society. It is argued here that this can be done in such a manner that there is a natural cascade of process models consistent with General Equilibrium: but these become progressively more complex as new functions are required to support the dynamics of the society. The first step into a mathematical institutional economics involves the invention of markets and money and the endogenization of price formation.

Tool Based Integration of Requirements Modeling and Validation into Business Process Modeling

2014 ◽  
pp. 285-309
Author(s):  
Sven Feja ◽  
Sören Witt ◽  
Andreas Speck
Keyword(s):  
Business Process ◽  
Process Modeling ◽  
Process Models ◽  
Software Systems ◽  
Functional Requirements ◽  
Model Driven ◽  
Level Of Abstraction ◽  
Textual Representations ◽  
Model Driven Software Development ◽  
The One

Business process models (BPM) are widely used for specification of software systems, as the basis for model driven software development. Hence, it is crucial to ensure that these BPMs fulfill the requirements they have to comply with. These requirements may originate from various domains. Many may be considered non-functional requirements. They are affecting privacy, security, as well as compliance or economic aspects. In order to avoid error-prone manual checking, automated checking techniques should be applied wherever possible. This requires expressing requirements in a formal manner. The common textual representations for such formal requirements are not well accepted in the modeling domain, since they are settled on a lower level of abstraction, compared to BPMs. In this chapter, the authors present the Business Application Modeler (BAM), which integrates formal requirement specification and automated checking with process modeling. On the one hand BAM supports different notations for process modeling. On the other hand a graphical notation, called G-CTL, for the formal specification of requirements is provided. G-CTL is based on temporal logic, and statements are expressed on the level of abstraction of the graphical process models. Furthermore BAM provides the ability to define selective views on process models. This allows complex domain specific annotations of processes as well as the assignment of responsibilities regarding functional domains. Moreover, BAM integrates into common requirements engineering processes.

The Formal Design Models of a Set of Abstract Data Types (ADTs)

2012 ◽  
pp. 288-315
Author(s):  
Yingxu Wang ◽  
Xinming Tan ◽  
Cyprian F. Ngolah ◽  
Philip Sheu
Keyword(s):  
Real Time ◽  
Cognitive Learning ◽  
Process Models ◽  
Behavioral Models ◽  
Abstract Data Types ◽  
Data Types ◽  
Dynamic Behaviors ◽  
Modeling Methodology ◽  
Abstract Data ◽  
Data Objects

Type theories are fundamental for underpinning data object modeling and system architectural design in computing and software engineering. Abstract Data Types (ADTs) are a set of highly generic and rigorously modeled data structures in type theory. ADTs also play a key role in Object-Oriented (OO) technologies for software system design and implementation. This paper presents a formal modeling methodology for ADTs using the Real-Time Process Algebra (RTPA), which allows both architectural and behavioral models of ADTs and complex data objects. Formal architectures, static behaviors, and dynamic behaviors of a set of ADTs are comparatively studied. The architectural models of the ADTs are created using RTPA architectural modeling methodologies known as the Unified Data Models (UDMs). The static behaviors of the ADTs are specified and refined by a set of Unified Process Models (UPMs) of RTPA. The dynamic behaviors of the ADTs are modeled by process dispatching technologies of RTPA. This work has been applied in a number of real-time and non-real-time system designs such as a Real-Time Operating System (RTOS+), a Cognitive Learning Engine (CLE), and the automatic code generator based on RTPA.

Debt Crises, Economic Adjustment, and Labour Standards

2018 ◽  
pp. 284-302 ◽  
Author(s):  
Juan Pablo Bohoslavsky ◽  
Franz Christian Ebert
Keyword(s):  
Financial Institutions ◽  
Economic Effects ◽  
International Human Rights Law ◽  
Human Rights Law ◽  
International Financial Institutions ◽  
Labour Law ◽  
Economic Adjustment ◽  
Labour Standards ◽  
The One ◽  
Practical Implications

This chapter examines the relation between economic adjustments, on the one hand, and labour standards, on the other. Section I reviews how labour standard issues have been addressed in different economic adjustment programmes, often initiated at the behest of international financial institutions, or the institutions of what was formerly known as the ‘Troika’. Subsequently, Section II analyses the legal and practical implications thereof. It explains how several labour law reforms required by international financial institutions in the context of economic adjustment have, on a number of occasions, driven countries into violations of international human rights law and international labour law in particular. Section III goes on to examine the economic case of deregulatory labour law reforms in the context of economic adjustment. It shows that the empirical evidence for negative economic effects of labour law in general and in the context of financial and economic crises in particular is at best highly controversial and cannot justify the highly problematic social effects and breaches of international law these reforms have often entailed.

Aid Effectiveness

2020 ◽  
pp. 59-76
Author(s):  
Constantine Michalopoulos
Keyword(s):  
World Bank ◽  
Financial Institutions ◽  
Poverty Reduction ◽  
Aid Effectiveness ◽  
Bilateral Aid ◽  
The World Bank ◽  
The World ◽  
Reduction Strategies ◽  
The One ◽  
The Imf

The collaboration the U4 launched at Utstein covered a wide variety of development issues handled by different international institutions. This involved in the first place coordination of their positions at the World Bank and the IMF, and the UN and its funds, programmes, and agencies. The World/Bank IMF were very important both because of the size and extent of their own programmes but also for helping developing countries manage the overall poverty reduction strategies within which all bilateral aid was supposed to fit. Increasing the effectiveness of bilateral aid could only succeed if it were part of a consistent overarching multilateral effort. This chapter starts with a discussion of U4 efforts to ensure that the poverty reduction strategies developed with the help of the World Bank/IMF in connection with debt relief actually reflected developing country priorities. It then moves on to U4’s efforts to improve the effectiveness of UN programmes which tended to be characterized by fragmentation and inefficiencies. The last part addresses the problem of coherence and collaboration between the IMF and the World Bank—the international financial institutions, on the one hand, and the UN and its agencies, on the other.

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