We show that the dispersion of private valuation reduces market liquidity and allocative efficiency of a dynamic OTC market. In this decentralized market, traders have time varying and heterogeneous private value over the asset and dealers act as competing mechanism designers. We characterize...

When governments trade-off maximizing general welfare with maximizing their own expenditure, the degree of central bank independence has implications for inflation, taxes and debt. Making the central bank more independent implies that, for any given level debt, inflation and taxes decrease,...