Democracy and money : lessons for today from Athens in classical times

The present book presents the Athenian monetary and financial system in relation to current problems of the international financial system. The authors argue, that useful lessons for the present may be drawn from the Athenian example. The authors maintain that to forestall another financial crisis like that of 2007/8, which may prove more unsettling nationally and internationally, the US must reform its central banking. In particular, the book explains how the main political institutions (mainly the Assembly of the citizens and the Council) were functioning regarding monetary matters. It explains the Athenian monetary system as a benchmark for reference and adaptation, which would provide an effective way out of the current dreadful predicament that government managed money holds for the US and the world at large. The Athenian monetary system may be conceived as a benchmark, for under it: i) money would be produced in private markets as every other good and service, e.g., money supply was driven by the private and the state sectors needs in combination ii) the general price level remained stall for almost two centuries iii) following the Athenian example, the US government should return to its main task of minding the common good through prudent fiscal policies, instead of hiding the looming risks of unsustainable national debt behind the Fed’s monopoly over the issuing of fiat money and reducing nominal interest rates close to zero.peer-reviewe

A Consistent Approach to Cost Efficiency Measurement

Consistent specifications of the allocative inefficiency function in 'cost plus input share equations' systems may be difficult, if not impossible, to find because most plausible ones violate certain reasonable "a priori" conditions. Moreover, the models to which they lead give rise to highly non-linear likelihood functions that are very hard to estimate. In an effort to confront these difficulties, this paper adapts an idea first suggested by Greene (1993) that allocative inefficiency ought to be related to input prices and allocative distortions in the input share equations. The system of 'cost plus input demand equations' that emerges is estimated by standard seemingly unrelated regression (SUR) techniques using data from private and state firms that operated in Greek manufacturing during the 1979-88 period. Among other findings, the estimates show that overall inefficiency for private and state firms was 63.5% and 102.2%, respectively in comparison with the least inefficient firms in their class. In relative terms these figures imply that state firms were almost 61% less efficient than private firms were. Technical and allocative reasons amounting to 64% and 36%, respectively, accounted for this excess inefficiency of state firms, in addition to differences in the utilization of labour, capital and debt. Lastly, it is found that the magnitudes of technical and allocative inefficiencies depend critically upon a self-consistent specification of the allocative inefficiency function. Copyright 2004 Blackwell Publishing Ltd.