One is to protect the revenues they bring in from "the ability to almost costlessly create money," he writes.
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"Employers can costlessly substitute higher paid, slightly older workers for identical but lower-paid, slightly younger ones," in Denmark, he says.
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After all, modern money is mostly an entry on a computer—capable of being transmitted instantly and virtually costlessly around the world.
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After all, a website-designer or a financial adviser in London can deliver her services to a Chinese client costlessly and instantly over the internet.
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This study pushed really strongly against that received wisdom that people can costlessly move from sector to sector (although we knew it could cause a net reduction in wages for low-skilled workers).
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If one could do this nearly costlessly — as one would have needed to be able to in order for it to be true that investors saw almost no chance of the peso losing its value against the dollar — then adding this insurance component to the long-Mexican-notes short-U.
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In this case, the appropriate liability for the nuclear owners would be zero: Construction of a nuclear unit would induce all those potentially affected to move elsewhere costlessly (or not to move near the nuclear plant in the first place), and any subsequent accident would cause no injuries or economic damage.
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Perfectly tradable goods, like shares of stock, are subject to the law of one price: they should cost the same amount wherever they are bought. This law requires an efficient market. Any discrepancy that may exist in pricing perfectly tradable goods because of foreign exchange market movements, for instance, is called an arbitrage opportunity. Goods that cannot be costlessly traded are not subject to this law.
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The marginal benefit of holding additional money is the decrease in transaction costs represented by (for example) costs associated with the purchase of consumption goods. With a positive nominal interest rate, people economise on their cash balances to the point that the marginal benefit (social and private) is equal to the marginal private cost (i.e., the nominal interest rate). This is not socially optimal, because the government can costlessly produce the cash until the supply is plentiful.
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Oxford University Press, . Williamson was credited with the development of the term "information impactedness", which applies in situations in which it is difficult to ascertain the costs to information. As he explained in Markets and Hierarchies, it exists "mainly because of uncertainty and opportunism, though bounded rationality is involved as well. It exists when true underlying circumstances relevant to the transaction, or related set of transactions, are known to one or more parties but cannot be costlessly discerned by or displayed for others".
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There are various ways of rationalizing a financial accelerator theoretically. One way is focusing on principal–agent problems in credit markets, as adopted by the influential works of Bernanke, Gertler and Gilchrist (1996), or Kiyotaki and Moore (1997). The principal-agent view of credit markets refers to the costs (agency costs) associated with borrowing and lending due to imperfect and asymmetric information between lenders (principals) and borrowers (agents). Principals cannot access the information on investment opportunities (project returns), characteristics (creditworthiness) or actions (risk taking behavior) of the agents costlessly.
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Two schools of analysis form the bulk of DSGE modeling:It has been suggested that the difference between RBC and New Keynesian models, when controlling for key supply channels, can be limited. See Cantore et al (2010) the classic RBC models, and the New-Keynesian DSGE models that build on a structure similar to RBC models, but instead assume that prices are set by monopolistically competitive firms, and cannot be instantaneously and costlessly adjusted. Rotemberg & Woodford introduced this framework in 1997. Introductory and advanced textbook presentations of DSGE modeling are given by Galí (2008) and Woodford (2003).
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Guido Calabresi in his book The Costs of Accidents (1970)The Cost of Accidents (1970), 135–403 argues that it is still efficient to hold companies liable that produce greater wealth.See also In the real world, where people cannot negotiate costlessly, there may be collective action problems of those who caused a nuisance, for instance by smoke emissions from a factory to many neighbouring farms, and so getting together to negotiate effectively can be difficult against a single polluter because of coordination problems. If it is efficient for the farmers to pay the factory to reduce its emissions, some of those farmers may hold off paying their fair share, hoping to get a free ride. The factory may be in a better position to know what measures to take to reduce harm, and can be the cheapest avoider, illustrating Coase's argument.
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