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on Regulation |
| By: | Toshihiro Okubo (HEI Genève - [Hautes Etudes Internationales, Genève]); Vincent Rebeyrol (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | This paper studies how market-specific entry sunk costs (regulation costs) affect the Home Market Effect (HME) with firm heterogeneity in marginal costs. our model is based on the Dixit-Stiglitz monopolistic competition model with firm heterogeneity plus regulation costs difference. We find that a regulation costs gap works as dispersion force by inducing a market potential gap, which reduces the HME and could cause the reverse HME or the anti-HME. The HME first rises and then fall in terms of trade openness, whereas the HME rises in terms of regulation costs gap coordination by technical barriers to trade (TBT) agreements. Firm heterogeneity dampens the dispersion force by the regulation costs difference and thus works as an agglomeration force. Firm heterogeneity causes a perfect spatial sorting, in which a large country attracts only high productivity firms, and vice versa. |
| Keywords: | Home market effect, firm heterogeneity, regulation costs, technical barriers to trade. |
| Date: | 2006–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00118871_v1&r=reg |
| By: | Hervé Boulhol (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | Previous analyses showed that product market deregulation often precedes labor market (LM) reforms. This paper introduces LM imperfections within an economic geography framework, the level of optimal LM regulation being based on each country's social preferences. Due to capital mobility, opening the economy to a country with a deregulated LM puts pressure on LM institutions. As the fall in trade costs increases the intensity of the agglomeration force, LM regulation loses in efficiency. The threat of relocation drives changes in LM policy, with suggests that the effect of liberalization might be found primarily in the weakening of employment protection, resulting in minimal actual relocations. |
| Keywords: | Deregulation, wage bargaining, capital mobility, agglomeration, relocations. |
| Date: | 2006–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00118951_v1&r=reg |
| By: | José María Usategui (Universidad del Pais Vasco) |
| Abstract: | In a context where demand for the services of a durable good changes over time, and this change may be uncertain, the paper shows that social welfare may be higher when the monopolist seller can commit to any future price level she wishes than when she cannot. Moreover, the equilibrium under a monopolist with commitment power may Pareto-dominate the equilibrium under a monopolist without commitment ability. These results affect the desired regulation of a durable goods monopolist in this context. |
| Keywords: | Durable good, commitment, demand variations, regulation |
| JEL: | D42 L12 L41 |
| Date: | 2006–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:dfaeii:200605&r=reg |
| By: | Guillaume R. Fréchette |
| Abstract: | There is a long history of models attempting to identify the causes of corruption, yet empirical analysis is complicated. Not only is data difficult to obtain and often available only for few countries and a limited number of years, but such estimation involves inherent complexities. This paper focuses on the use of panel data techniques to better identify factors that affect bureaucratic corruption. Furthermore, this paper identifies an endogeneity problem which arises in the analysis of the causes of corruption, and a new instrumental variable is proposed to solve it. To help in this endeavor, a data set is employed which provides information for as many as 135 countries over a span of sixteen years. Results show that neglecting the endogeneity problem leads to severely biased results. Using panel data techniques reveals that the availability of rents is a crucial determinant of corruption and that previous research may have underestimated the economic significance of rents on corruption. Furthermore, corruption is shown to be procyclical. <P>Depuis longtemps, des modèles sont utilisés dans le but de déterminer les causes de la corruption. Toutefois, l’analyse empirique demeure complexe. Qui plus est, les données sont difficiles à recueillir et couvrent souvent un nombre restreint de pays et une période limitée. Ce genre d’évaluation présente aussi des complexités inhérentes. Le présent document met l’accent sur le recours à des techniques de données de panels dans le but de mieux connaître les facteurs qui influent sur la corruption bureaucratique. En outre, cette analyse souligne le problème d’endogénéité qui ressort de l’analyse des causes de la corruption et propose une nouvelle variable instrumentale permettant de contrer celui-ci. Pour faciliter la démarche, ce document utilise un ensemble de données fournissant des renseignements sur au moins 135 pays et pour une période de seize ans. Les résultats indiquent que si le problème d’endogénéité n’est pas pris en compte, les résultats sont sérieusement biaisés. De plus, la corruption est décrite comme étant procyclique. |
| Keywords: | corruption, endogeneity, income, rents, corruption, endogénéité |
| JEL: | H8 K4 C33 |
| Date: | 2006–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-28&r=reg |
| By: | Kjell Bjørn Nordal (Norges Bank (Central Bank of Norway)) |
| Abstract: | I evaluate a bank's incentives to implement a risk sensitive regulatory capital rule and to invest in improved risk measurement. The decision making is analyzed within a real options framework where optimal policies are derived in terms of threshold levels of risk. I also evaluate the situation where exercise or non-exercise of the options to implement or invest are signals about the underlying quality of the loan portfolio. The framework is used for a numerical evaluation of banks' decision of whether to use internal rating based models for credit risk (the IRB-approach) under the new Basel accord (Basel II), where the dynamic behavior of risk is described by an Ohrnstein-Uhlenbeck process. I discuss empirical implications of the evaluation framework. |
| Keywords: | Risk measurement, capital structure, real options, Basel II |
| JEL: | G13 G21 G28 G32 |
| Date: | 2006–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2006_12&r=reg |
| By: | Luca Barani |
| Abstract: | The European integrative experiment rests on a dynamic equilibrium of intergovernmental and supranational features of the regulatory framework of the European Union. One of the most important challenges to this system currently lies in finding ways to maintain its capacity to operate and, at the same time, adapt its problem-solving instruments to changing conditions of the regulatory politics. The current pragmatic mix of regulative strategies employed in the European Union allows for different possible scenarios concerning future development of the regulatory system within the EU. The article analyses the emergence and proliferation of new forms of decision-making and related legal techniques in the European Union. The origins and possible trajectory of a whole spectrum of contemporary legal techniques and governance methods, ranging from 'hard' to 'soft', are being contextualized. Special attention is given to the Open Method of Coordination and examples of its application in the social policy field. |
| Keywords: | regulatory politics; rule of law; social policy |
| Date: | 2006–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:erp:conweb:p0024&r=reg |