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Agency problems within the firm are a significant hindrance to efficiency. We propose trust between coworkers as a superior alternative to the standard tools used to mitigate agency problems: increased monitoring and incentive-based pay. We show how trust induces employees to work harder, relative to those at firms that use the standard tools. In addition, we show that employees at trusting firms have higher job satisfaction, and that these firms enjoy lower labor cost and higher profits. Finally, we show how trust may also be easier to use within the firm than the standard agency-mitigation tools.

Insurance --- Labor --- Macroeconomics --- Taxation --- Corporate Governance --- Finance: General --- Relation of Economics to Social Values --- Production and Organizations: General --- Altruism --- Asymmetric and Private Information --- Wages, Compensation, and Labor Costs: General --- Labor Economics: General --- Corporate Finance and Governance: Government Policy and Regulation --- Taxation, Subsidies, and Revenue: General --- Insurance Companies --- Actuarial Studies --- General Financial Markets: Government Policy and Regulation --- Labour --- income economics --- Corporate governance --- role & responsibilities of boards & directors --- Public finance & taxation --- Insurance & actuarial studies --- Finance --- Wages --- Tax incentives --- Economic sectors --- Financial institutions --- Moral hazard --- Financial sector policy and analysis --- Labor economics --- Financial risk management --- United States --- Income economics --- Role & responsibilities of boards & directors

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Private transfers between individuals or through organized charities are increasingly viewed as an alternative for government social insurance programs. This paper models the incentive effects of government subsidized private transfers and finds that while there is a significant welfare benefit to subsidizing private transfers, there is also a significant welfare cost to this policy. It is shown analytically, as well as through simulations, that the optimal subsidy to private transfers is positive for a wide range of parameter values. This result indicates that subsidized private transfers in net terms are welfare enhancing.

Finance: General --- Labor --- Macroeconomics --- Personal Finance -Taxation --- Public Finance --- Altruism --- Asymmetric and Private Information --- Efficiency --- Optimal Taxation --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Demand and Supply of Labor: General --- National Government Expenditures and Welfare Programs --- General Financial Markets: Government Policy and Regulation --- Aggregate Factor Income Distribution --- Public finance & taxation --- Labour --- income economics --- Finance --- Tax allowances --- Labor markets --- Social assistance spending --- Moral hazard --- Income --- Taxes --- Expenditure --- Financial sector policy and analysis --- National accounts --- Income tax --- Labor market --- Expenditures, Public --- Financial risk management --- United States --- Income economics

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This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.

Finance: General --- Inflation --- Investments: Stocks --- Macroeconomics --- Money and Monetary Policy --- Monetary Policy --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Price Level --- Deflation --- General Financial Markets: General (includes Measurement and Data) --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Investment & securities --- Finance --- Monetary economics --- Stocks --- Stock markets --- Monetary base --- Asset prices --- Financial institutions --- Financial markets --- Prices --- Money --- Stock exchanges --- Money supply --- United States

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Despite revisions to bank capital standards, fundamental shortcomings remain: the rules for setting capital requirements need to be simpler, and resolution should be an essential part of the capital requirement framework.We propose a new system of capital regulation that addresses these needs by making changes to all three pillars of bank regulation: only common equity should be recognized as capital for regulatory purposes, and risk weighting of assets should be abandoned; capital requirements should be assigned on an institution-by-institution basis according to a regulatory (s,S) approach developed in the paper; a standard for prompt, corrective action is incorporated into the (s,S) approach.

Banks and banking --- Bank capital --- Capital --- State supervision. --- Banks and Banking --- Financial Risk Management --- Finance: General --- General Financial Markets: Government Policy and Regulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Financial Crises --- Financial services law & regulation --- Banking --- Economic & financial crises & disasters --- Capital adequacy requirements --- Bank regulation --- Financial crises --- Bank resolution --- Financial regulation and supervision --- Basel Core Principles --- Asset requirements --- State supervision --- Crisis management --- United States

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Using data on the distribution of migrants from Africa, GDP growth forecasts for host countries, and after estimating remittance multipliers in recipient countries, this paper estimates the impact of the global economic crisis on African GDP via the remittance channel during 2009-2010. It forecasts remittance declines into African countries of between 3 and 14 percentage points, with migrants to Europe hardest hit while migrants within Africa relatively unaffected by the crisis. The estimated impact on GDP for relatively remittance-dependent countries is 2 percent for 2009, but will likely be short-lived, as host country income is projected to rise in 2010.

Global Financial Crisis, 2008-2009. --- Gross domestic product -- Forecasting. --- Migrant remittances -- Africa. --- Global Economic Crisis, 2008-2009 --- Subprime Mortgage Crisis, 2008-2009 --- Financial crises --- Exports and Imports --- Macroeconomics --- Statistics --- Emigration and Immigration --- Economic Growth and Aggregate Productivity: General --- International Migration --- Remittances --- Aggregate Factor Income Distribution --- Current Account Adjustment --- Short-term Capital Movements --- International economics --- Econometrics & economic statistics --- Migration, immigration & emigration --- Income --- Outward remittances --- Balance of payments statistics --- Migration --- Balance of payments --- Population and demographics --- National accounts --- Economic and financial statistics --- International finance --- Emigrant remittances --- Emigration and immigration --- United States --- Gross domestic product --- Forecasting --- Econometric models.