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on Law and Economics |
| By: | Juan S. Mora-Sanguinetti (Banco de España) |
| Abstract: | Compared with the rest of the European countries the weight of the house property market in Spain is very high, which is consistent with the weakness of the tenancy market. In this context, it has often been argued that an inefficient judicial system, implying a cumbersome procedure to evict a non-paying tenant or simply needing a long period to execute a decision, may be an important determinant of the tenancy market weakness, as it constrains the effective supply by reducing the profitability of landlords. This research has studied this effect econometrically using a panel data approach and exploiting the differences in the judicial efficiency that exists among the Spanish provinces. After controlling for several other factors, this study concludes that the degree of inefficiency of the judicial system has a positive, although minor, impact on the differences in the property share among provinces in Spain. |
| Keywords: | judicial efficiency, property market, tenancy market, contract enforcement |
| JEL: | K40 R21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1025&r=law |
| By: | Roxana Gutierrez-Romero |
| Abstract: | This paper analyses the factors that give rise to the existence of the informal economy and how it evolves over time. Using an occupational-choice model the paper shows that at early stages of development, informal and formal markets coexists, but in the long-run the size of the informal economy can decline depending on the initial distribution of wealth. The model shows that the higher the initial wealth inequality the larger the size of the informal economy and the higher the wealth inequality will be in the long run. The paper calibrates the model using numerical simulations. |
| Keywords: | informal economy, occupational choice and inequality |
| JEL: | D31 K4 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2010-07&r=law |