dc.contributor.author | Gu, Chao | eng |
dc.contributor.author | Guzman, Mark G. | eng |
dc.contributor.author | Haslag, Joseph H. | eng |
dc.date.issued | 2010 | eng |
dc.description.abstract | In this paper, we study a model economy that can account for the distribution of payments within a day. In our model, debtors choose when to arrive at the settlement location. Concomitant with choosing their arrival, debtors are making a production decision. We assume there is a cost to arriving early; that is, late-arrival is associated with a technology that dominates early arrival/production. Second, we treat the debtor's choice as hidden from creditors. We derive conditions under which the planner allocates production to each type of agents. In the decentralized setting, there is a nonarbitrage condition that is consistent with a positive intraday rate. The central bank may be able to implement the planner's allocation with a proper intraday interest rate. In some cases, the optimal intraday rate is positive. | eng |
dc.identifier.citation | Department of Economics, 2010 | eng |
dc.identifier.uri | http://hdl.handle.net/10355/8362 | eng |
dc.language | English | eng |
dc.publisher | Department of Economics | eng |
dc.relation.ispartof | Economics publications (MU) | eng |
dc.relation.ispartofcommunity | University of Missouri-Columbia. College of Arts and Sciences. Department of Economics | eng |
dc.rights | OpenAccess. | eng |
dc.rights.license | This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License. | |
dc.source.harvested | MU Department of Economics Web site | eng |
dc.subject.lcsh | Settlement costs -- United States | eng |
dc.subject.lcsh | Debtor and creditor | eng |
dc.subject.lcsh | Interest rates -- Econometric models | eng |
dc.title | Production, Hidden Action, and the Payment System | eng |
dc.type | Working Paper | eng |