Found 3 article(s) for author 'Externalities'

Do Fire Sales Create Externalities?

Do Fire Sales Create Externalities? Adi Sunderam, October 12, 2017, Opinion, “We develop three novel measures of how much of the price impact of their trading different mutual funds internalize. We show that mutual funds that internalize more of their price impact hold larger cash buffers and use these buffers more aggressively to accommodate inflows and outflows. As a result, stocks held by these funds have lower volatility, and flows out of these funds have smaller spillover effects on other funds holding the same securities. Our results suggest that there are meaningful fire sale externalities in the mutual fund industry, and that a planner coordinating among funds would choose different liquidity management policies.Link

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Regulation versus Taxation

Regulation versus Taxation. Alberto Alesina, September 16, 2013, Paper. “We study which policy tool and at what level a majority chooses in order to reduce activities with negative externalities. We consider three instruments: a rule that sets an upper limit to the activity which produces the negative externality, a quota that forces a proportional reduction of the activity, and a proportional tax on it. For all instruments the majority chooses levels which are too restrictive when the activity is performed mainly by a small fraction…”  Link verified March 28, 2014

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Network Effects and Social Inequality

Network Effects and Social Inequality. Filiz Garip, December 2011, Paper. “Students of social inequality have noted the presence of mechanisms militating toward cumulative advantage and increasing inequality. Social scientists have established that individuals’ choices are influenced by those of their network peers in many social domains. We suggest that the ubiquity of network effects and tendencies toward cumulative advantage are related …” Link

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