Showing papers on "Purchasing power published in 1996"

Identifying innovative national markets for technical consumer goods

Abstract: Focuses on population characteristics that appear to make one nation more or less innovative for technical consumer products. Finds three predictors ‐ individualism, uncertainty avoidance and purchasing power ‐ to be related to national levels of new product ownership within Europe. Discusses the results, focusing on their implications for marketers seeking to export innovative technological consumer goods to Europe and elsewhere.

Home Demand and British Industrialization

Abstract: Household budget studies are used to assess working-class demand for manufactures over industrialization. Contrary to demand-side proponents, increased urbanization, enhanced opportunities for women's and children's work, and a declining subsistence sector all retrenched consumption patterns into demand for the products of traditional industries and decreased demand for the products of new manufacturing industries. However, consideration of national expenditure on necessities shows an increasing surplus available for discretionary expenditure between 1801 and 1841. This reflects an increased purchasing power of the middle and upper classes that may have manifested itself as substantially increased demand for domestic manufactures.

Money in motion : the post Keynesian and circulation approaches

Abstract: Acknowledgements - Notes on the Contributors - PART 1: EDITORS' INTRODUCTION: MONETARY CIRCULATION AND EFFECTIVE DEMAND - PART 2: BASIC THEORETICAL APPROACHES - Introduction - A: Post Keynesian Theory - What are the Essential Elements of Post Keynesian Monetary Theory? P.Davidson - The Essential Characteristics of Post Keynesian Economics H.P.Minsky - The Money Supply Process: a Historical Reinterpretation B.J.Moore - B: Circulation Views - A New Paradigm for the Determination of Money Prices B.Schmitt - Money as Purchasing Power and Money as a Stock of Wealth in Keynesian Economic Thought A.Graziani - Beyond Scarcity: A Reappraisal of the Theory of the Monetary Circuit A.Parguez - Payments Systems and Dynamics in a Monetary Economy J.Cartelier - PART 3: THE TWO TRADITIONS: COMMENTARY AND HISTORY - Introduction - A: Searching for the Roots of Circulation Theory - The Circuit of Money in a Production Economy E.J.Nell - Does Circulation need a Monetary Standard? G.Deleplace - The Relevance to Modern Economics of the Banking School View P.Mehrling - The National Economy Studied as a Whole: Aspects of Circular Flow Analysis in the German Language B.Schmitt & S.Greppi - B: Confronting the Mainstream - The Ambiguity of the Notion of General Equilibrium with a Zero-Price for Money C.Benetti - Basic Choices in Keynesian Models of Credit G.A.Dymski - C: Comparing Post Keynesian and Circulation Approaches - Post Keynesian Fundism and Monetary Circulation M.Seccareccia - Investment Decisions in Circuit and Post Keynesian Approaches: a Comparison R.Arena - PART 4: ENDOGENEOUS MONEY - Introduction - A: The Relevance of the Institutional Framework - Money in the Circular Flow L.R.Wray - Monetary Circulation and Overdraft Economy F.Renversez - B: Explanations of Endogeneity: Accommodation or Structure - Money Supply Endogeneity: What are the Questions and Why do they Matter? R.Pollin - Beyond Endogeneous Money, Toward Endogeneous Finance T.I.Palley - Monetary Policy in an Economy with Endogeneous Credit Money M.Lavoie - PART 5: INNOVATIVE FINANCE Introduction - A: Finance, Risks and Crises - Systems Risks, Financial Innovations, and the Financial Safety Net M.Aglietta - Financial Crises and the Business Cycle: How Different are the 80's? M.Wolfson - B: Finance and the Business Cycle - Finance, Profit Expectations, and Investment in the Business Cycle: Theories and Empirical Evidence W.Semmler & R.Franke - Finance Constraints, Accumulation, and Business Cycles M.Jarsulic - PART 6: POLICY - Introduction - The Policy Implications of the Current Banking Crisis, or, Is Free Market Capitalism Compatible with Endogeneous Money? J.A.Kregel - The Spheres of Industrial and Financial Circulation Revisited, and their Implications for Post Keynesian Economic Policy S.Rousseas - Profit Squeeze, Rentier Squeeze, and Macroeconomic Policy under Fixed and Flexible Exchange Rates G.Epstein - The European Plan for the Creation of a Single Currency S.de Brunhoff - Afterword - Index

For Here or To Go? Purchasing Power Parity and the Big Mac 1

Abstract: The theory of Purchasing Power Parity (PPP) has a long and venerable tradition in international economics. Fundamentally, the theory states that prices of identical goods in different countries should be equal after adjusting for the rate of exchange between currencies. As a theoretical proposition, PPP serves as a solid foundation for thinking about the conditions under which prices in international markets adjust to attain long-term equilibrium. As an empirical matter, however, PPP has been a more elusive concept.2 The Economist has established another, though somewhat more recent, tradition: the Big Mac standard. Since 1986, The Economist has published yearly tongue-in-cheek comparisons of the prices of McDonald’s Big Mac sandwich in various countries around the world, evaluating prevailing exchange rates on the basis of these price differentials. A similar index has also been developed by the Union Bank of Switzerland in its annual comparison of prices and incomes around the globe. These lighthearted studies of international hamburger prices have predictably whet the appetites of the popular media and the financial press and have even given serious scholars food for thought.3 The attractive feature of the Big Mac as an indicator of PPP is its uniform composition. With few exceptions, the component ingredients of the Big Mac are the same everywhere around the globe. (See the shaded insert, “A Big Mac Is a Big Mac Is a Big Mac?”) For that reason, the Big Mac serves as a convenient market basket of goods with which the purchasing power of different currencies can be compared. Just as is the case with broader measures, however, the Big Mac standard fails to meet the demanding tests of PPP. In this article, we review the fundamental theory of PPP and describe some of the reasons why it might not be expected to hold as a practical matter. Throughout, we use the Big Mac data as an illustrative example. In the process, we also shed some light on the value of the Big Mac sandwich as a palatable measure of PPP.

Money as Purchasing Power and Money as a Stock of Wealth in Keynesian Economic Thought

Abstract: Ever since the publication of Keynes’s General Theory, the definition of money as a stock of wealth has become dominant in economic theory. As all know, it has not always been so in the history of economic ideas. Originally the dominant character of money was considered as being endowed with purchasing power, and money was consequently defined as a means of exchange. The emphasis was moved away from the means-of-exchange function toward the store-of-wealth function as the result of a long debate concerning the definition and measurement of the value of money. It was then clear that money, if defined as mere purchasing power, could only be endowed with an indirect utility, originating from the utility of the goods money could buy on the market. On the other hand, if money had to yield utility on its own, it had to be useful not only when spent upon commodities but also when kept as a store of wealth. Money had consequently to be defined as a stock of liquid wealth.

From Universal Food Subsidies to a Self-Targeted Program: A Case Study in Tunisian Reform

Abstract: Scarred by the violent responses to earlier cuts in its extensive food subsidy program, the Tunisian Government developed self-targeting subsidies, both politically acceptable and protective of the purchasing power and nutritional status of the poor, to reduce the budgetary costs of these transfers. Two mutually reinforcing approaches to self-targeting (where the poor identify themselves) are currently being implemented. The first tactic, a variant of the inferior goods approach, involves shifting subsidies to narrowly-defined items within a product line that are perceived by consumers to be of lower quality because they possess certain unattractive features in their packaging or ingredients. Although the intrinsic values of these products are preserved, these perceived inferior characteristics discourage consumption by wealthier households. The second method, the superior goods approach involves easing government controls to allow the private sector to market higher-quality, unsubsidized products that appeal to wealthier consumers, who then consume less of the subsidized varieties.

Exercising purchasing power for preventive care

Abstract: Prologue: More than five years ago the US, Public Health Service released Healthy People 2000, a document laying out the federal government's strategy for health promotion and disease prevention for the decade. The document built upon “the strong foundation of federalism that undergirds the American public health system by involving both private and public sectors at all levels,” in the words of James O, Mason, who was then assistant secretary for health in the Department of Health and Human Services, This paper by Helen Schauffler and Tracy Rodriguez provides an example of how one powerful employer purchasing coalition, the Pacific Business Group on Health (PBGH), has taken the private-sector side of this mandate seriously. The PBGH, based in California's San Francisco Bay Area, is one of the nations largest private employer purchasing groups. More than thirty major employers, representing 2,5 million persons, are members of the PBGH, formerly the Bay Area Business Group on Health, A powerful force for c...

The Long-Run Costs of Moderate Inflation

Abstract: Long-run price stability is generally considered to be a primary goal of monetary policymakers in many countries. One reason policymakers care about inflation is that it can harm economic performance. Numerous studies of the impact of inflation on economic performance have focused on whether increases in inflation reduce economic growth in the long run (Barro, Fischer 1993, Bruno and Easterly, and Clark). These studies have found that prolonged high inflation does in fact reduce economic growth, but they were not able to detect a significant long-run relationship between real growth and low or moderate inflation. Because anti-inflationary policies typically have short-run costs, such as higher unemployment and slower economic growth, the results from these studies may lead people to ask whether such policies are appropriate when inflation is low or moderate. It is contended here that anti-inflationary policies may be appropriate, even if low to moderate longrun inflation does not reduce long-run growth, if inflation harms the economy in other ways. Three potentially harmful consequences of inflation are considered: (1) inflation uncertainty, (2) real growth variability, and (3) relative price volatility. These consequences are costly because they reduce economic efficiency-and therefore the level of economic output-and consumer welfare. This article discusses the costs of inflation uncertainty, real growth variability, and relative price volatility, and examines their empirical relationship with inflation. The article shows that inflation uncertainty, real growth variability, and relative price volatility all tend to rise as long-run inflation rises from low to moderate levels. As a result, it is concluded that policymakers may find it justifiable to pursue anti-inflationary policies even when inflation is low. DOES INFLATION UNCERTAINTY RISE WITH INFLATION? One possible consequence of rising inflation is that inflation uncertainty may also rise. Inflation uncertainty is costly to an economy because it can lead to higher real interest rates, which in turn reduces real economic activity and consumer welfare. However, inflation may not be associated with greater inflation uncertainty if inflation is only moderate. This section discusses the costs of inflation uncertainty and shows that inflation uncertainty is higher in countries with moderate long-run inflation rates than in countries with low long-run inflation rates.1 Why is inflation uncertainty costly? To understand how inflation uncertainty raises real interest rates, it is useful to consider how nominal interest rates respond to expected price increases. A simple example involves the purchase of a 1-year Treasury bill. If there were no uncertainty about inflation, the nominal interest rate on the bill would equal the sum of the real return required by investors to purchase the bill and the expected inflation rate over the 1-year investment horizon. The real return is the amount that investors would require in order to part with their money for a year in the absence of inflation. With inflation, however, the bill's principal will purchase fewer goods and services at the end of the year than at the beginning. For the principal to buy the same amount of goods and services when the bill matures, the return on the bill must be boosted by the inflation rate. Since the interest rate is determined when the bill is purchased, the interest rate can only incorporate the expected inflation rate as opposed to the actual inflation rate. Accounting for expected inflation still may not fully insulate investors or borrowers from the risk of inflation because actual and expected inflation are rarely equal. If actual inflation turns out to be greater than expected, then the investor's real return is less than initially anticipated. Conversely, if actual inflation is less than expected, borrowers end up paying more than is necessary to compensate investors for the loss of purchasing power caused by inflation. …

Regression estimates of per capita gdp based on purchasing power parities

Abstract: Policy ResearchWorkingPapets disseminate the findings of work in progress and enoourage the exchange ofideas among Bank staffand allothers interested in development issues. Thesepapers, distributedby theResearchAdvisory Staff, carry thenames of theauthors, reflect only theirviews, and should be used and cited accordingly. Thefindings,interpretations, and conclusions are the auLhors own.TThey should not be attributed to the World Bank, its Board of Directors, its management, or any of ita member countries. P ub lic D is cl os ur e A ut ho riz ed

The Economics of Professional Journal Pricing.

Abstract: The problems of excessive inflation and price discrimination in journal pricing continue to plague libraries. In analyzing the causes of the current crisis, the authors review and evaluate previous contributions to the literature on journal pricing with particular emphasis on the three types of price discrimination practiced by journal publishers. The authors suggest that the monopoly power of commercial publishers, combined with a third-party payment system, are at the heart of the problem. They suggest solutions that involve providing appropriate incentives to journal users, adoption of more equitable pricing systems, and employing the potential monopoly purchasing power of library associations to lower prices.

Changing Paradigms in Medical Payment

Abstract: The enormous level and rate of increase in health care expenditures in the United States during the past several years has been well documented. A combination of increased health insurance coverage and advances in medical technology, coupled with perverse economic incentives resulting in supplier-induced demand and cost-unconscious demand from patients, has created this explosion in health care spending. This explosive increase has given rise to a variety of private and public sector initiatives to reform the system. With a greater concentration of purchasing power among managed care payors and increased competition among providers, a trend toward dramatically reduced payment for providers continues. Under capitation, the most rapidly growing form of managed care, providers have contracts from insurance companies that call for them to provide care for a fixed per patient annual payment, regardless of what this provision actually costs. This form of per capita payment typically offers drastically reduced payment to providers, forcing them to adopt a cost-reduction strategy. Providers must contain costs while enhancing quality or else perish in this new cost-conscious environment. This new payment paradigm means that price, which is often dictated by the payors, including government, determines the providers' cost rather than cost determining price as it was under the traditional indemnity insurance schemes. It is this new imperative to contain costs while maintaining or else improving the quality of health outcomes that is behind many of the recent mergers and other collaborative activities that we are witnessing nationwide among hospitals and other health care organizations. (Arch Intern Med. 1996;156:357-360)

Constraints and room for manoeuvre in the German inflation of the early 1920s

Abstract: The relentless increase of our floating debt depresses the purchasing power of our money, restricts our credit and pushes prices to fraudulent heights. The volume of paper money is no sign of prosperity, (Quite right!) but a measure of increasing impoverishment. (Renewed agreement.) And the more the value of money collapses, the more violent become the struggles over wages and salaries, which despite everything are rarely able to keep pace with the rise in prices. An endless ratchet! It poses the gravest possible threat to trade and transport, to every branch of industry and labour. This danger must be countered with every available means, if we are to protect our people from the fearful misery of a collapse not only of the state finances but also of the nation's economy. God forbid that our people should only come to understand the full extent of our present plight as a consequence of [such] a collapse! For this reason we must promote the reform of the Reich's finances with the utmost urgency. (Interjection from the Independent Social Democrats.) That will require a great sense of public responsibility on the part of the whole population. (Chancellor Fehrenbach in the Reichstag, 28 June I920)2

Shopping Center Tenant Selection and Mix

Abstract: In a market economy, retail tenants cluster by type and by location. The result is a hierarchy of centers offering a mix of goods and services appropriate to the market area. This occurs because different goods and services have different trade areas and minimum purchasing power requirements. Central place theory helps describe, explain, and predict changes in the area or purchasing power of a region. A good market analysis will use those factors identified in the theory to select potential tenants.

Theoretical foundations of the "Geary method" for international comparisons of purchasing power and real incomes

Abstract: This paper provides a centenary review of the method of calculating real incomes and purchasing power parities proposed by Roy Geary. This method is the most widely used in major international comparisons, but it is often criticised for its lack of theoretical foundations. I dis­ cuss the properties of the method and its competitors in the light of both practical and theoretical considerations. I also propose a new method of computing "true" or, as I call them, "Geary- Koniis" exchange rates and world prices and I argue that the Geary method provides the best available approximation to the true values.

Yellowbacks Out West and Greenbacks Back East: Social-Choice Dimensions of Monetary Reform*

Abstract: Oftentimes, in the wake of political developments, monetary questions follow. Should the European Economic Community force adoption of a single money? Or can the job of designating Europe's money be left to the market? Has the rapid dissolution of the Soviet Union left a monetary vacuum? If so, what will fill it? Economists find themselves being pressed to answer these questions and others like them. In the 1970s, Friedrich A. Hayek [18] proposed safeguarding against governmental inflationary abuses by giving private issuers of money full scope to operate. Under Hayek's scheme, each issuer could adopt a distinct unit of account, and the various units would fluctuate freely against one another. Profit incentives would restrain overissue, because people would not hold units lacking purchasing-power stability. A unit's stable purchasing power would strengthen the demand for that unit, enabling the issuer to have more loans outstanding and earning interest. Even if one unit should come to dominate, the threat of potential competition would check inflationary tendencies.

Policy Considerations for a Realistic Approach to Hunger in Nigeria

Abstract: Hunger is usually caused by a break down in the food security mechanisms of a society and lack of purchasing power. In Nigeria, food shortages have become common since 1972, culminating in the food crises of the 1980s, made worse by the implementation of a macroeconomic economic adjustment policy in 1986.The paper confirms the hunger situation and presents evidence to show that it is of wider significance than hitherto acknowledged. The paper proposes policy options to tackle the situation and these include the development of agriculture to attain self-sufficiency in staple food production which must be backed by political will using a widely accepted framework and well articulated set of programmes and strategies borne out of consensus.

Saldo Comercial, transferências governamentais e movimento de capitais inter-regional

Abstract: This study presents an interpretative scheme on interregional flows in Brazil, based on avaiable statistics on trade balance, government revenues and expenses, investments by the public sector, and savings. The study focuses on the year 1985, since it the only one for which complete and reliable information was avaiable. The main argument deriving from this analysis concerns the economic relations on which Brazilian Federalism is based. From the point of view of private capital, it reinforces the idea that the Southeast is the region that benefits the most from interregional exchange, to the detriment of poorer regions like the North and Northeast. Government investments, by compesating for existing imbalances in exchange of private capital, end up maintaining the process of accumulation at the center, since public resources, by guaranteeing the poorer regions's purchasing power, return to the more developed regions in the form of consumption.

Long-Run Real Exchange Rates: A Cointegration Analysis

Abstract: Long-run purchasing power is tested on 16 OECD countries using data from 1960 to 1994; PPP is rejected for some countries (Canada, Japan, Switzerland, Austria, Italy and Spain) and not rejected for others (Sweden, France, Holland and the United Kingdom). For the latter countries, impulse response functions show that half of a disturbance to the equilibrium real exchange rate disappears within three years. The method used is Johansen's maximum likelihood approach to cointegration. Simulations are used to obtain empirical critical values of the tests.

Indirect Convertibility and Irving Fisher's Compensated Dollar

Abstract: Advocates of the private issue of money by banks have proposed to solve the problem of the credibility of such an issue by having the banks commit themselves to redeeming their money in terms of a standard bundle of goods. Since it would be inconvenient for both the banks and their customers actually to deal with such bundles, the proposal has been made to have the redemption take place with an amount of gold "actually worth, at prevailing market prices, as many standard bundles as the Unit denominations of the banknotes and deposits being redeemed" (Yeager and Greenfield 1989, p. 410). This system of"indirect convertibility" has frequently been described as similar to Irving Fisher's proposal for a compensated dollar (see, for example, ibid. pp. 418-19; Cowen and Krozner 1994, ch. 3; Dowd 1995). There is, indeed, a similarity in the fact that both schemes involve the use of gold and that the purpose of both is to maintain the purchasing power of money. Otherwise, however, there are basic differences between them. To begin with, changes in the price of gold in Fisher's proposal are not those determined in a free market, but changes in the monthly mint price at which the government stands ready to buy and sell unlimited quantities of gold: in particular, to (say) lower the mint price of gold (in Fisher's words, to increase the gold content of the dollar) if the price level should increase, and to raise the mint price if the price

Financial Innovation and the Price Level: Wicksell and the New Monetary Economics

Abstract: Money of account, namely that in which debts and prices and general purchasing power are expressed, is the primary concept of a theory of money. (J. M. Keynes)

Tourism afloat: the hidden discourse of relations aboard a cross-channel ferry

Abstract: MUCH of the literature on tourism to date can be seen as presenting a particular view of host-guest relations, one in which the guests are in positions of power visa-vis the hosts who entertain them (Shamir 1984, Sutton 1967). 'As a tourist, a person is at leisure ... others must serve while the tourist plays' (Nash 1989: 45). Such literature reveals certain assumptions about the notions of hospitality and the power of money which entitles the spender to particular services (Adams 1972, Brewer 1984). The tourist, as a paying guest, is presented as somehow powerful as a result of his or her ability to control money and initiate transactions. The purchasing power of tourists, be it in terms of commodities or leisure time itself, is central to the tourism industry. This paper is an ethnographic account of 'ferry tourism', which, despite its prominent place within the tourism industry, has been much neglected in the literature on it. This study attempts to fill this gap by concentrating on the specific environment of one ferry operating between England and France. Unlike much of the literature on tourism, the focus will include the perspectives of both passengers

Globalization : a new role for developing countries in an integrating world

Abstract: The author reviews trends and developments in world trade, investigating the elements involved in the accelerated integration of world trade rights in the past decade. He explores what conditions and policy initiatives make it easier for countries to benefit from global trade and capital flows, and concludes: (1) World trade relative to world income has grown more in the 1990s than in the 1970s or 1980s, mainly due to: (a) the desynchronization of business cycles in Japan, Europe and the United States; (b) the expanded role in world trade of developing countries; and (c) the transfer of purchasing power that supported heightened import demand among developing countries. (2) Measured as the ratio of trade to output, the trend toward global integration accelerated sharply in the mid-1980s. A wave of liberalization among low- and middle-income countries resulted in a shift from an inward-oriented development strategy to an outward-oriented one. (3) World trade will grow more than 6 percent a year (on average) in the coming decade, although prospects for trade integration differ by region. (4) Balanced integration--with export and import capacities expanding sustainably--can be achieved only through policies that encourage long-term productive investment in the export sector.

The Acquisitions of Serials in East German Academic Libraries Before and After the "Wende"

Abstract: When, after World War II, German academic libraries undertook the recovery from the low point in their acquisitions which had been precipitated by fascism and the war, they encountered the same problem in all four zones of occupation: the old Reichsmark had become a devalued internal currency not usable for purchasing abroad. The currency reform of 1948 solved this problem for the three Western zones of Allied occupation. but only intensified the problem for libraries in the Soviet Zone, for then the purchasing power of their currency ended at the border crossing. Soon thereafter, currency reform was also undertaken in the Soviet Zone, but it did not effect any positive change for the libraries there, since this new currency was also not freely convertible. There were no problems m purchasing items either of domestic production after the founding of the GDR on October 10, 1949 or from the Soviet Union and countries of the People's Democracies, but they could not buy anything from the Federal Republic of Germany or the West. This limit which the currency reform imposed on the importation of literature from the Western world had, from the Communist perspective, a positive and negative side to it. On the one hand, it was easier to fend off politically and ideologically unwanted publications. On the other hand, however, it made the acquisition of politically neutral literature in the fields of natural science, technology and medicine more difficult.

Section e market-oriented health care reforms: trends and future options

Abstract: In many (predominantly) publicly financed health care systems market-oriented health care reforms are being implemented or have been proposed. The purpose of these reforms is to make resource allocation in health care more efficient, more innovative and more responsive to consumers preferences while maintaining equity. At the same time. the advances in technology result in a divergence of consumers' preferences with respect to health care and urge society to (re)think about the meaning of the solidarity principle in health care. In this paper we indicate some international trends in health care reforms and explore some potential future options. From an international perspective we can observe a trend towards universal mandatory health insurance. contracts between third-party purchasers and the providers of care, competition among providers of care and a strengthening of primary care. These trends can be expected to continue. A more controversial issue is whether there should also be competition among the third-party purchasers and whether in the long run there will occur a convergence towards some "ideal" model. Although regulated competition in health care can be expected to yield more value for money, it might yield both more efficiency and higher total costs. It has been argued that equity can be maintained in a competitive health care system if we interpret equity as "equal access to cost-effective care within a reasonable period of time". Because the effectiveness of care has to be considered in relation to the medical indication and the condition of the patient, the responsibility for cost-effective care rests primarily with the providers of care. Guidelines and protocols should be developed by the profession and sustained by financial incentives embedded in contracts. It has been argued that the third-party purchasers could start to concentrate on the contracts with the primary care physicians. Contracts with other providers could then be a natural complement to these contracts. Coordinated-care contracts between the third-party purchasers and the consumer of care could provide the consumer with monetary incentives to go to efficient providers. A consumer choice of insurance contract could give the consumer an opportunity to make important choices in health care. However, each society has to make its own choices about what care should be available to everybody independent of an individual's purchasing power. Copyright (~7 1996 Elsevier Science Ltd

THE RE‐MONETARIZATION OF WELFARE BENEFITS: Entitlements, liabilities and transaction costs in the relationship between citizens and public agencies: the US EBT system and the outlook for European citizen cards

Abstract: *: The revolution in transaction costs brought about by new technology can make it economically efficient to restore purchasing power to citizens in the case of in-kind benefits. Analysis of the economic and institutional evolution of the US electronic benefit transfer (EBT) experience shows that a system of welfare payments can evolve either towards monopolistic (or semi-monopolistic) solutions promoted by government or towards competitive, open-market solutions. The EBT system has addressed the diseconomies created by the high proportion of unbanked citizens among welfare recipients by creating electronic pseudoaccounts for the unbanked piggybacked on the commercial payments infrastructure. The EBT card is the first obligatory payment card to be issued by a government, albeit through the intermediary of a government-designated issuer (GDI). Moving to chip cards, the problems posed by setting up a large-scale network of terminals and the fact that ‘universal’ welfare cards are born as ‘natural’ government monopolies may lead banks, governments and central banks to consider the great economies of scale and of critical mass for migration that can be offered by combining various functions in a single, universally distributed ‘citizen card'. Starting with health care, European citizen cards could gradually take over functions such as the transfer of benefits to specific groups of citizens, payment for other public services, payment of national and local taxes, and payment for utilities. This would make explicit the level of subsidization now implicit in the provision of benefits in kind. The clear indication of deductions, reimbursements and subsidies in the context of payment would mark a considerable advance in the transparency of the welfare market.