nep-law New Economics Papers
on Law and Economics
Issue of 2014‒10‒13
seven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Review of Russian Legislation in the Sphere of Tax and Civil Legislation in 2013 By Irina Tolmacheva
  2. Labor Market and Income Effects of a Legal Minimum Wage in Germany By Viktor STEINER; Kai-Uwe MUELLER
  3. Thinking About Corruption in Greece By Costas Azariadis; Yannis M. Ioannides
  4. Unbundling the incumbent: Evidence from UK broadband By Mattia Nardotto; Tommaso Valletti; Frank Verboven
  5. Sequential Product Innovation, Competition and Patent Policy By George Norman; Lynne Pepall; Dan Richards
  6. Credit access after consumer bankruptcy filing: new evidence By Jagtiani, Julapa; Li, Wenli
  7. Economics for Substantive Democracy By Manuel Couret Branco

  1. By: Irina Tolmacheva (Gaidar Institute for Economic Policy)
    Abstract: This paper deals with a review of the tax and civil legislation in Russia.
    Keywords: Russian tax and civil legislation
    JEL: K1 K2 K3
    Date: 2014
  2. By: Viktor STEINER; Kai-Uwe MUELLER
  3. By: Costas Azariadis; Yannis M. Ioannides
    Abstract: The paper addresses the issue of corruption, which appears to be endemic in Greece. It reviews the facts about corruption as multi-faceted phenomenon and its close relationship to tax evasion, by comparing Greece to its EU partners, as well internationally. It addresses corruption as an instance of anti-social behavior by means of a number of simple metaphors that allow reliance on powerful tools of modern social interactions and property rights literatures. It emphasizes that whereas tepid enforcement might reduce somewhat corruption and other instances of anti-social behavior, drastic enforcement is required to move an economy and society to qualitatively different levels of such practices. The paper reviews different EU proposals regarding enforcement mechanisms and pro- poses three key constitutional amendments that are required to allow long-delayed reforms to take hold in Greece.
    Keywords: Bribery, compliance, constitutional amendments, corruption, corruption perception index, economic growth, fiscal deficits, games, multiple equilibria, public goods, tax evasion, trust, whistleblowing
  4. By: Mattia Nardotto (University of Cologne); Tommaso Valletti (Imperial College London, University of Rome “Tor Vergata” & CEPR); Frank Verboven (KU Leuven, Telecom ParisTech and CEPR)
    Abstract: We consider the impact of a regulatory process forcing an incumbent telecom operator to make its local broadband network available to other companies (local loop unbundling, or LLU). Entrants are then able to upgrade their individual lines and offer Internet services directly to customers. Employing a very detailed dataset covering the whole of the UK, we find that, over the course of time, many entrants have begun to take advantage of unbundling. LLU entry only had a positive effect on broadband penetration in the early years, and no longer in the recent years as the market reached maturity. In contrast, LLU entry continues to have a positive impact on the quality of the service provided, as entrants differentiate their products upwards compared to the incumbent. We also assess the impact of competition from an alternative form of technology (cable) which is not subject to regulation, and what we discover is that inter-platform competition has a positive impact on both penetration and quality.
    Keywords: regulation, competition, entry, telecommunications, broadband, local loop unbundling
    JEL: D22 K23 L43 L51 L96
    Date: 2014–10–03
  5. By: George Norman; Lynne Pepall; Dan Richards
    Abstract: This paper examines the role of patent policy in a spatial model of sequential innovation. Initial entrepreneurs develop a new product market and anticipate that subsequent innovation may lead to a product line that consumers value more highly. The likelihood of sequential innovation increases with the number of initial early entrants in the market. Patent protection that encourages early entry can therefore raise the probability of both initial and subsequent innovation. We determine the optimal patent breadth as a function of key industry characteristics of both consumer taste and the new technology.
    Keywords: sequential innovation, patent policy, entry
    JEL: L5 O25
  6. By: Jagtiani, Julapa (Federal Reserve Bank of Philadelphia); Li, Wenli (Federal Reserve Bank of Philadelphia)
    Abstract: Supersedes Working Paper No. 13-24 This paper uses a unique data set to shed new light on credit availability to consumer bankruptcy filers. In particular, the authors’ data allow them to distinguish between Chapter 7 and Chapter 13 bankruptcy filings, to observe changes in credit demand and credit supply explicitly, and to differentiate existing and new credit accounts. The paper has four main findings. First, despite speedy recovery in their risk scores after bankruptcy filing, most filers have much reduced access to credit in terms of credit limits, and the impact seems to be long lasting (well beyond the discharge date). Second, the reduction in credit access stems mainly from the supply side as consumer inquiries recover significantly after the filing, while credit limits remain low. Third, new lenders do not treat Chapter 13 filers more favorably than Chapter 7 filers. In fact, Chapter 13 filers are much less likely to receive new credit cards than Chapter 7 filers even after controlling for borrower characteristics and local economic environment. Finally, the authors find that Chapter 13 filers overall end up with a slightly larger credit limit amount than Chapter 7 filers (both after the filing and after discharge) because they are able to maintain more of their old credit from before bankruptcy filing. The authors’ results cast doubt on the effectiveness of the current bankruptcy system in providing relief to bankruptcy filers and especially its recent push to get debtors into Chapter 13.
    Keywords: Bankruptcy; Credit limit; Credit performance; Financial crisis; Bankruptcy reform
    JEL: G01 G02 G28 K35
    Date: 2014–08–07
  7. By: Manuel Couret Branco (Department of Economics, Universidade de Évora)
    Abstract: What is the scope of economics as a science, what is economics for? Real freedom or what we call substantive democracy has never been an objective of economics. In this perspective freedom, or the lack of it, would not be a purpose of a particular economic system, but at best one of its side effects. In this paper I sustain that economics’ discourse has become one the most substantial contributors to what could be called the erosion of democracy. The first argument used in this case against economics refers to its attempt to be considered a neo-naturalistic science; the second concerns the fact that economics considers democracy contradictory to the expression of its scientific rationality and; the third, that economics crowds out people from decision-making processes by pushing them into the hands of experts. What part should economics be called to play in this search for substantive democracy? This issue is all the more critical that economics has reached the status of a major political fact. Partisan political programs have essentially become economic programs, and economic variables have thereby become major global political issues. One of the ways for economics to contribute to substantive democracy is to propose an alternative discourse to mainstream economics. An economics favorable to substantive democracy should, thereby, be political rather than naturalistic, pluralist rather than monist and, instead of crowding out people from decisions processes, should aim at the co-production of economic knowledge with those concerned by the outcome of economic decisions.
    Keywords: Economic Theory; Political Economy; Democracy; Decision-Making.
    JEL: A13 B40 K00 P16
    Date: 2014

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