Browsing by Author "Chami, R"

Now showing 1 - 7 of 7
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    Are immigrant remittance flows a source of capital for development?
    (IMF Staff Papers, 2005-07-06) Chami, R; Fullenkamp, C; Jahjah, S
    There is a general presumption in the literature and among policymakers that immigrant remittances play the same role in economic development as foreign direct investment and other capital flows, but this is an open question. We develop a model of remittances based on the economics of the family that implies that remittances are not profit-driven, but are compensatory transfers, and should have a negative correlation with GDP growth. This is in contrast to the positive correlation of profit-driven capital flows with GDP growth. We test this implication of our model using a new panel data set on remittances and find a robust negative correlation between remittances and GDP growth. This indicates that remittances may not be intended to serve as a source of capital for economic development. © 2005 International Monetary Fund.
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    Capital Trading, Stock Trading, and the Inflation Tax on Equity
    (Review of Economic Dynamics, 2001-07-01) Chami, R; Cosimano, TF; Fullenkamp, C
    A market for used capital goods, or financial instruments that represent the ownership of the used capital goods, induces inflation taxes on wealth and on the nominal income flows that they provide. This paper explicitly introduces trading in either used capital goods or financial instruments into the standard stochastic growth model with money and production. These two monetary economies are equivalent. The value of the firm is equal to the firm's capital stock divided by inflation. The resulting asset-pricing conditions indicate that the effect of inflation on asset returns differs from the effects found in the literature by the addition of a significant wealth tax. Journal of Economic Literature Classification Numbers: E0, E4, E5. © 2001 Academic Press.
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    Capital trading, stock trading, and the inflation tax on equity: A note
    (Review of Economic Dynamics, 2003-10-01) Baier, S; Carlstrom, CT; Chami, R; Cosimano, TF; Fuerst, TS; Fullenkamp, C
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    The market value of family values
    (Cato Journal, 1997-12-01) Chami, R; Fullenkamp, C
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    The Stock Market Channel of Monetary Policy
    (1999) Chami, R; Cosimano, TF; Fullenkamp, C
    argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders` demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.
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    Trust and efficiency
    (Journal of Banking and Finance, 2002-08-23) Chami, R; Fullenkamp, C
    Agency problems within the firm are a significant hindrance to efficiency. We propose trust between coworkers as a superior alternative to the standard tools used to mitigate agency problems: increased monitoring and incentive-based pay. We model trust as mutual, reciprocal altruism between pairs of coworkers and show how it induces employees to work harder, relative to those at firms that use the standard tools. In addition, we show that employees at trusting firms have higher job satisfaction, and that these firms enjoy lower labor cost and higher profits. We conclude by discussing how trust may also be easier to use within the firm than the standard agency-mitigation tools. © 2002 Elsevier Science B.V. All rights reserved.
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    Trust as a Means of Improving Corporate Governance and Efficiency
    (2002) Chami, R; Fullenkamp, C
    Agency problems within the firm are a significant hindrance to efficiency. We propose trust between coworkers as a superior alternative to the standard tools used to mitigate agency problems: increased monitoring and incentive-based pay. We show how trust induces employees to work harder, relative to those at firms that use the standard tools. In addition, we show that employees at trusting firms have higher job satisfaction, and that these firms enjoy lower labor cost and higher profits. Finally, we show how trust may also be easier to use within the firm than the standard agency-mitigation tools.