Details

Autor(en) / Beteiligte

• Delorme, Charles D.
• Mounts, William S.

Titel

Small Saver Discrimination, Anticipated Inflation and Economic Welfare

Ist Teil von

• The American Economist (New York, N.Y. 1960), 1981-04, Vol.25 (1), p.53-56

Ort / Verlag

Los Angeles, CA: Holmes & Meier Publishers

Erscheinungsjahr

1981

Quelle

Business Source Ultimate【Trial: -2024/12/31】【Remote access available】

Beschreibungen/Notizen

• Discrimination against the small saver occurs when he cannot gain access to open market instruments as a result of the requirement of high minimum denominations. A microeconomic model developed through time preference analysis can be used to illustrate the effect of arbitrary portfolio restrictions on economic welfare in times of anticipated inflation. The model assumes the economy is made up of households, firms, and a unified banking system. A household may either consume or save out of a given income. Saving is possible through bank savings accounts and equities issued by firms. The model indicates that Regulation Q and minimum denomination requirements restrict the small saver's options. This results in more balances being held in demand deposits than the small savers wish. Thus, the flow of saving that is available for capital expansion is reduced. Opportunity for reduced inflation is lost when the capital stock is not expanded.