A Welfare Analysis of the Diamond Dybvig Model

Sussman, Oren (1992) A Welfare Analysis of the Diamond Dybvig Model. Economics Letters, 38 (2). pp. 217-222.

Abstract

I show how to design a welfare-improving tax system for a Diamond-Dybvig (DD) related economy. In addition to its relevance to the DD literature, the paper constructs a nice example for a Pareto-improving intervention when markets are incomplete, and provides a welfare analysis of the market for liquidity.

Item Type: Article
Subject(s): Finance
Centre: Faculty of Finance
Date Deposited: 23 Feb 2012 13:29
Last Modified: 23 Oct 2015 14:07
URI: http://eureka.sbs.ox.ac.uk/id/eprint/2934

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