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on Law and Economics |
| By: | Aghion, Philippe (Harvard University); Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris) |
| Abstract: | Can public policy interfere with culture, such as beliefs and norms of cooperation? We investigate his question by evaluating the interactions between the State and the Civil Society, focusing on the labor market. International data shows a negative correlation between union density and the quality of labor relations on one hand, and state regulation of the minimum wage on the other hand. To explain this relation, we develop a model of learning of the quality of labor relations. State regulation crowds out the possibility for workers to experiment negotiation and learn about the true cooperative nature of participants in the labor market. This crowding out effect can give rise to multiple equilibria: a "good" equilibrium characterized by strong beliefs in cooperation, leading to high union density and low state regulation; and a "bad" equilibrium, characterized by distrustful labor relations, low union density and strong state regulation of the minimum wage. We then use surveys on social attitudes and unionization behavior to document the relation between minimum wage legislation and the beliefs about the scope of cooperation in the labor market. |
| Keywords: | social capital, quality of labor relations, trade unions, minimum wage |
| JEL: | J30 J50 K00 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3680&r=law |
| By: | Oliver Budzinski (Faculty of Business Administration and Economics, Philipps Universitaet Marburg); Isabel Ruhmer (Center for Doctoral Studies in Economics (CDSE) University of Mannheim) |
| Abstract: | Advances in competition economics as well as in computational and empirical methods have offered the scope for the employment of merger simulation models in merger control procedures during the past almost 15 years. Merger simulation is, nevertheless, still a very young and innovative instrument of antitrust and, therefore, its ‘technical’ potential is far from being comprehensively exploited and teething problems in its practical use in the antitrust environment prevail. We provide a classification of state-of-the-art merger simulation models and review their previous employment in merger cases as well as the problems and limitations currently associated with their use in merger control. In summary, merger simulation models represent an important and valuable extension of the toolbox of merger policy. However, they do not qualify as a magic bullet and must be combined with other, more traditional instruments of competition policy in order to comprehensively unfold its beneficial effects. |
| Keywords: | merger simulation, merger control, antitrust, oligopoly theory, auction models, mergers & acquisitions |
| JEL: | L40 C15 K21 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200807&r=law |
| By: | Gustavo Federico Torrens |
| Abstract: | Specialization and trade rest on institutions that protect property rights and enforce agreements. Frequently, in economic analysis institutions are just assumed to exist, or it is implicitly supposed that the political game can establish them. Once this assumption is done, the invisible hand does its work properly. It doesn’t matter if humans beings are benevolent or selfish for the gains from specialization and trade be realized. However, it is not easy to build institutions, neither are they a free lunch. The paper shows that ideology, understood as a self-imposed code of conduct, contributes to reduce the cost of instituting an industrious society, inducing people to assign their time and effort to productive activities rather than to theft. |
| Keywords: | ideology, self-imposed codes of conduct, crime, enforcement of property rights. |
| JEL: | K42 Z13 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:378&r=law |
| By: | Luca Fiorito |
| Abstract: | The aim of this paper is to provide an assessment of John R. Commons’ adoption of Wesley N. Hohfeld’s framework of jural opposites and correlatives in order to construct his transactional approach to the study of institutions. Hohfeld’s influence on Commons, it is argued, was both positive and negative. On the one hand, Commons, followed Hohfeld and recognized that such concepts as property and inheritance actually represent an aggregation of numerous types of legal relations. Hohfeld’s schema provided a powerful rhetorical and analytical tool whereby these highly abstracts conceptions could be reduced to a limited number of primary elements. Moreover, Hohfeld’s schema appeared to be consistent with Commons’ general methodological and psychological commitments. On the other hand, Commons’ forging of “transaction” as the elementary unit of economic analysis can be seen as an attempt to go beyond Hohfeld. Commons was in fact unsatisfied with Hohfeld’s bi-lateral treatment of jural relations and with his neglect of the role played by state officials in enforcing transactions and, in so doing, in promoting specific individual interests as collective public policies |
| JEL: | B15 B25 B52 K10 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:536&r=law |
| By: | Lejot , Paul (Asian Institute of International Financial Law); Arner, Douglas (Asian Institute of International Financial Law); Schou-Zibell, Lotte (Asian Development Bank) |
| Abstract: | Securitization offers a range of benefits for Asiaâs financial systems and economies as a mechanism to assist funding and investment. As a form of structured finance, reliable and efficient securitization can assist development by enabling financial systems to deepen and strengthenâthus contributing to overall economic growth and stability. It must be recognized, however, that there are both overt and more subtle risks in certain uses of securitization. The credit and liquidity crisis that began in the United States and spread to other developed financial systems in mid-2007 exposed the danger associated with securitization: excessive risk-taking or regulatory capital arbitrage rather than a tool to assist more conventional or conservative approaches to funding, risk management, or investment. Securitization has also been criticized for rendering financial markets opaque, while contributing to a growing emphasis in the global economy of credit intermediation conducted in capital markets rather than through banks. This study examines the institutional basis of these concerns by investigating the use of securitization in East Asia, questioning both the growth in regional activity since the 1997/98 Asian financial crisis, and the reasons for it remaining constrained. The paper concludes with a discussion of proposals to support proper development of securitization in the region, including institutional mechanisms that could better allow securitization to enhance development and financial stability. If East Asia begins to make fuller use of securitization, its motive will be to meet funding or investment needs in the real economy rather than balance sheet arbitrage of the kind that peaked elsewhere in 2007. |
| Keywords: | Securitization; East Asia; debt markets; risk transfer |
| JEL: | F30 G20 K20 |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0012&r=law |
| By: | Amedeo Argentiero (Faculty of Economics, University of Rome "Tor Vergata"); Michele Bagella (Faculty of Economics, University of Rome "Tor Vergata"); Francesco Busato (Faculty of Economics, University of Rome "Tor Vergata") |
| Abstract: | This paper implements a methodology that exploits firms and households’ optimality conditions to measure money laundering for the Italian economy. This approach, first implemented by Ingram, Kocherlakota, and Savin (1997) to the household production sector, and by Busato, Chiarini and Di Maro (2006) for measuring the underground economy, allows to generate high frequency series for the money laundering using a theoretical two-sector dynamic general equilibrium model calibrated over the sample 1981:01-2001:04. The analysis of the generated series suggests two main results. First, money laundering accounts for approximately 12 percent of aggregate GDP; second, money laundering is more volatile than aggregate GDP, and it is negatively correlated with it. |
| Keywords: | E26,E32,K40 |
| JEL: | E26 E32 K40 |
| Date: | 2008–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:128&r=law |
| By: | Morris E. Morkre; Dean Spinanger; Lien H. Tran |
| Abstract: | This paper investigates the effects of U.S. AD actions on DCs. It first considers administrative actions by the U.S. Department of Commerce, which decides AD margins for countries. It then considers decision making by the U.S. International Trade Commission, which determines injury to domestic industry. The econometric results show that USDOC actions lead to significantly higher AD margins for NMEs (all DCs) than for MOEs. Among countries that suffer from U.S. AD actions DCs have a significantly higher ratio of dumped imports to total imports (relative dumped imports) compared with middle income countries. However, the results also show that relative dumped imports of high income countries are also greater than middle income countries |
| Keywords: | antidumping (AD), AD margin, developing countries (DCs), market-oriented economies (MOEs), nonmarket economies (NME), relative dumped imports, underselling, zeroing |
| JEL: | F13 K42 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1438&r=law |
| By: | Alberto Pera (Gianni, Origoni, Grippo & Partners) |
| Abstract: | <p align="justify">During the last few years the application of EC antitrust law has been subject to a number of changes, aiming at giving a greater role to economic analysis. This is leading to the abandonment of the traditional ordoliberal inspiration of EC competition law. This paper explores how justi ed is this change. In particular it argues that economic analysis provides di erent views of how competition works and thet it may a ect the application of antitrust at di erent stages. From this point of view a more economic approach is not necessarily incompatible with a reformed ordoliberal paradigm. What appears incompatible is an approach which substitutes eciency for competition. Such an approach has gained a role in the US antitrust, but its extension to the EC legal context is bound to produce a number of problems, and to lead to results di erent from the desired ones.</p> |
| Keywords: | antitrust,models of competition,ordoliberal paradigm,EC competition law |
| JEL: | O1 O11 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper13&r=law |