Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

On the Friedman Rule in search models with divisible money

Abstract: This paper studies the validity of the Friedman rule in a search model with divisible money and divisible goods in which the terms of trades are determined endogenously. We show that ex post bargaining generates a holdup problem similar to the one emphasized in the labor-market literature. Buyers cannot obtain the full return that an additional unit of money provides to the match, which makes the purchasing power of money inefficiently low in equilibrium. Consequently, even though the Friedman rule maximizes the purchasing power of money, it fails to generate the first-best allocation of resources unless buyers have all the bargaining power.

A free lunch with robots – can a basic income stabilise the digital economy?:

Abstract: The discussion on the possible implications of the digital economy for labour continues unabated. An essential dimension of the discussion is the widely shared view that a basic income could guarantee sufficient purchasing power for unemployed, underemployed and precarious workers should technological unemployment and labour market insecurity increase. A budget-neutral basic income has serious limitations as an economic stabilisation grant, but if financing proposals are revised, these limitations can be tackled. Even though guaranteeing sufficient purchasing power for unemployed, underemployed and precarious workers does not necessarily require an unconditional universal benefit, it seems clear that traditional activation based on strict means-testing and obligations will not be a strategy flexible enough to guarantee sufficient consumer demand in fluctuating labour markets. An economically sustainable solution might be to reduce means-testing gradually and to study carefully the effects.

Software system for real monetary instruments

Abstract: A data processing method for introducing an asset-backed fixed-income security that will function as a master real currency unit with a constant value. The method consists of the steps of tracking by means of a digital computer: 1) the flow of quantitative data generated by originating financial instruments denominated in a real currency unit and amortized with a real rate of interest; 2) pooling the real financial instruments for the purpose of establishing a tax conduit to issue asset-backed securities; and 3) the flow of quantitative data generated by using structured financing, such that the conduit issues a class of regular certificates and a residual class of certificates; and then denominating Class “A” certificates in a master real currency unit which can then be used by the holders to represent and transfer purchasing power in a constant monetary unit.

Beyond Transition Towards Inclusive Societies

Abstract: Received wisdom has favoured broad-stroke economic reforms for transition Europe and Central Asia since the fall of the Berlin Wall. Many have argued that privatization and deregulation would unleash the productive energy of the market and attract foreign capital. This advice was seen to bear fruit. Following the transition recession of the early 1990s, and especially after the crisis of 1998, the region saw a decade of broad-based and uninterrupted recovery. Livelihoods improved, and poverty declined on average in every country. This report builds on evidence that, despite these gains, a significant number of people in transition Europe and Central Asia continue to feel dejected, and believe that their position in society has declined. While some of these feelings may be rooted in the uncertainty that has accompanied market relations and greater freedoms, something more fundamental is at play. Even in the decade of recovery and growth, inequalities continued to widen— especially between central and peripheral regions. The recovery failed to lift significant segments of the population out of poverty. Many people fell further behind. Fundamental to this analysis is the concept of social exclusion. This report links the social exclusion/inclusion paradigm, as developed in the European Union context, with the human development paradigm, as articulated by Amartya Sen. It starts from the premise that people value not only consumable goods and services but also things that cannot be consumed—activities and abilities that reinforce human dignity and self-respect. For example, we value employment not only because the income derived increases our purchasing power, but also because it makes us feel like worthy members of society. Human development is about a growing number of people leading lives that they increasingly value