We propose a new approach to the normative analysis of public-good provision in an economy that is large so that any one individual is too insignificant to have a noticeable effect on the provision levels of public goods. In such an economy, the standard mechanism design problem of calibrating...

We study the impact of a nancial transactions tax on a market where financial institutions trade with each other. There are two main results: First, if all banks can honor their short-term obligations, a financial transactions tax is entirely neutral. Second, in a model with correlated...