Transaction Purposes Research Articles

Trendtex Trading Corporation v. Central Bank of Nigeria

111Sovereign immunity — Restrictive theory — Whether part of modern International law — Whether applicable in English courts — Distinction between acta iure imperii and iure gestionis — Whether based upon nature or purpose of transaction — Agencies of foreign State — Central Bank — Whether entitled to sovereign immunityInternational law in general — Relation to municipal law — Customary international law — Whether part of the law of England — Whether English courts entitled to give effect to changes in the rules of international law — Doctrines of transformation and incorporation — Doctrine of binding precedent — Applicability when English courts consider international law — The law of England

Adm Milling Co. v. Republic of Bolivia

Sovereign immunity — Foreign State — Restrictive theory of sovereign immunity — Commercial transaction — Purpose of transaction — Contract for the purchase of wheat flour — Whether relevant that wheat flour intended for humanitarian or national use — The law of the United States

From status to contract: the significance of agrarian relations of production in the West, Japan, and in ‘Asiatic’ Persia

This paper focuses upon the distinction which Maine and others have drawn between relations of status and those of contract. The particular aspect of contract which interests us is that, due to its characteristic impersonality, it enables individuals and groups who aresociallyunequal because of stratification, or who have no social links and hence no status at allvis-à-viseach other—enables them to negotiate and enter into binding agreement with each other aspoliticalandlegalequals. Contract can do this because, unlike status, the former splits the whole-person, enabling him to offer for the purpose of transaction only a singular and specialized aspect of himself to a singular and specialized aspect of another or other partners: the socialpersonaof each participant is set aside. Through this impersonality, contract not only cancels out anysocialconsideration or difference between the participants, but also achieves temporal specificity (delimiting, in advance, the duration of the tie established by the transaction),—whereas interpersonaldealings bind the partners in a relationship that has temporal continuity.

The Effect of Compensating Balance Requirements on the Profitability of Borrowers and Lenders

The rationality of compensating balance requirements has been widely debated in the literature and among participants in the market for loanable funds. Rationality in this context refers to a net gain in interest income for the lending bank in the transaction without, at the same time, an increase in interest cost to the borrowing firm; or, conversely, a decrease in interest expense to the borrower without, simultaneously, a decrease in income derived from interest on the transaction by the bank. The lack of consensus as to whether or not compensating balance requirements are rational is based on the absence of uniform assumptions regarding the imposition of these requirements as well as by their restrictive, if not unrealistic, nature. Thus, Davis and Guttentag [2] and Hodgman [9] come to the conclusion that compensating balance requirements (hereinafter also known as c.b.) are indeed rational. However, this conclusion is based on the assumption that the borrowing firm maintains voluntary demand deposits in the lending bank or in another bank (i.e., balances that the firm employs for transaction and/or precautionary purposes which do not serve to satisfy c.b. for any loan or service performed by either bank) and that these deposits are sufficient in quantity to meet c.b. On the other hand, Hellweg [8] finds the use of c.b. irrational inasmuch as he assumes a lack of voluntary balances in either bank. In between these two extremes, Gibson [7], Shapiro and Baxter [11], and Wrightsman [13] suggest that c.b. may either be rational or irrational depending on the proportion of these balances satisfied through the voluntary holdings of the borrowing firm.

The Demand for International Liquidity: A Test of the Square-Root Law

In analyzing the demand for international liquidity, one can distinguish liquidity held for transactions purposes from that held for precautionary purposes. (This distinction was first applied in [5] .) former balances are assets of a country's commercial banks, the latter of its central bank and treasury. In precise terms, commercial banks' foreign exchange is used to finance international transactions in general, irrespective of the state of the country's balance of payments, while official reserves are employed solely to finance deficits and surpluses in the balance of payments. For both transactions and precautionary balances, a theory of demand depending exclusively on the volume of international transactions has been proposed. However, a comprehensive measure of the volume of international transactions has never been applied in empirical work on the demand for international liquidity. Rather, trade only in goods (specifically, commodity imports) has been the sole measure of transactions utilized. Indeed, most writers simply equate merchandise trade with total international transactions. For example, Williamson declares, The question that remains is whether the growth of trade will raise the demand for reserves. [16, p. 696] genesis of the analysis of the transactions demand for foreign exchange is Baumol's result [2] that an individual household or firm has a 0.5 elasticity of des mand for cash with respect to the value of its transactions. Baumol's model involves

The Effect of Bank Credit Cards On the Household Transactions Demand for Money

In recent years monetary economists have displayed a small, but growing interest in the impact of bank credit cards on economic variables.l Of particular interest has been the question of the effect of credit cards on the demand for and velocity of money. Most economists believe that the money supply partially determines the level of economic activity. Changes in the demand for money due to the increased use of credit cards are likely to alter the linkage between the stock of money and other economic aggregates. This study serves to link theoretical models of the transactions demand for money to empirical observations on a cross-section of households in order to provide answers to the above question. At present, credit card usage varies widely across households; a considerable number of individuals have credit cards but are not active users. A cross-section study of households can be used to identify the relation between different levels of credit card usage and household demand for demand deposits. The results of the crosssection study can be extrapolated to describe potential money demand by households in a world where credit cards are widely used by everyone for transactions purposes. A number of plausible hypotheses can be proposed to describe the effect of credit card transactions on the household demand for money. One hypothesis is that active card users tend to hold higher average demand deposit balances than non-users.

Die optimale Transaktionskasse vom Typ M1 und M2

Abstract Optimal Type M1 und M2 Transaction Cash For a long time now, the quantity concepts M1 and M2 have been generally accepted in both the money quantity statistics of central banks and in money supply theory. The theory of the demand for money, however, has hardly been developed at all in this respect. The essay sets out to examine a special area of the theory of demand for money, namely that of transaction cash, and to derive the demand functions for money for transaction purposes for both M1and M2. The traditional literature on optimal determination of individual transaction cash (Baumol-Tobin) derives the optimal distribution of M2between M1(cash and demand deposits) and M2- M1(time deposits) satisfactorily, but starts out from a given stock of M2. One of the aims of the essay is to determine M2, which ıs interpreted as an alternative to the holding of goods by both households and firms. One important result arrived at by the study is that the demand for type Ma transaction cash is interest-inelastic and that the income elasticities dıffer for M1and M2. A second object of the study is to investigate the relationship between optimal transaction cash of types M1and M2and the inflation rate. Whereas in the case of inflation the demand for type M2is inversely related to the expected inflation rate, the decrease in type M1transaction cash results from two substitution effects: the rising cost of M1compared to time deposits on account of the rise in the nominal interest rate and the rising cost of M1compared to the holding of goods with a value equivalent to the expected inflation rate. This last case explains why “payment practices” (e.g. in inflationary economies) are not an “institutional” datum, but the result of economic choices.

A MODEL OF THE DEMAND FOR MONEY BY HOUSEHOLDS

THE THEORETICAL FOUNDATIONS of the demand for for transactions purposes rests, to a large degree, upon the inventory optimization approach. The contribution of this type of approach to economic theory is purported to be its rationalization for the holding of through a cost minimization procedure where transactions costs along with lack of synchronization between receipts and expenditures are explicitly considered. However, this lack of synchronization has been considered either completely random or completely exogenous. The first group has examined optimal behavior in a stochastic context. The works of Miller and Orr (1966) and Whalen (1966) are among this type and are usually viewed as characterizing firm behavior under uncertainty. The latter group consists of certainty models with uniform behavior as in Baumol (1952) and Tobin (1956). Household behavior has been relegated to the certainty world indicated here. The household unit is viewed as receiving a homogenous asset, called money, at exogenous intervals and exchanging money for goods in infinitesimal amounts at a uniform rate throughout the period. Two serious oversimplifications exist in this caricature of demand. First, is not a homogenous good. Demand deposits and currency possess distinct characteristics that should be explicitly considered when analysing household demand. A general model of the transactions demand for should derive independent demand functions for both demand deposits and currency. Second, when the fact that a non-zero cost is associated with purchases of commodities, the infinite shopping trips implicitly assumed heretofore become suboptimal. A more realistic model will yield a finite number of trips for goods purchases.'

GAMES NURSES PLAY

Instead of recognizing a problem and trying to find a solution, we otten, in Eric Berne's terms, play games. Here are some games played by nurses who work in hospitals.

A Note on the Transactions Demand for Cash

In 1952 Professor William J. Baumol published an inventory model for determining the optimum transactions demand for cash.' The implications of this model have received considerable attention in subsequent literature, and the article has become a required reading for students of monetary theory. Considering the attention Baumol's model has received, it is curious that an apparent omission has not been recognized. Baumol presents two cases. In the second case the firm invests I dollars and withholds R dollars for transactions purposes during the period (RIT), then commences to disinvest in amounts, C, for the remainder of the period, (IIT). In deriving the demand for cash Baumol states, . . the total cost of withholding the R dollars and investing the I dollars will be