This paper introduces intergenerational equity into the analysis of transitions to a market economy. Analyzing Social Security privatization, we find that payroll tax labor market distortions, rather than capital tax capital market distortions, are the major source of any efficiency gain from a...

We derive the inflation elasticity of the demand for domestic currency using a shopping time model. The resulting transactions cost function is solidly grounded in a theory of the transaction process. The implied production functions for monetary services cannot have a constant elasticity of...