|
on Regulation |
| By: | Crespi Francesco; Costantini Valeria |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:200708&r=reg |
| By: | Pages, Carmen; Ahsan, Ahmad |
| Abstract: | This paper studies the economic effects of legal amendments on different types of labor laws. It examines the effects of amendments to labor dispute laws and amendments to job security legislation. It also identifies the effects of legal amendments related to the most contentious regulation of all-Chapter Vb of the Industrial Disputes Act-which stipulates that firms with 100 or mor e employees cannot retrench workers without government authorization. The analysis finds that laws that increase job security or increase the cost of labor disputes substantially reduce registered sector employment and output but do not increase the labor share. Labor-intensive industries, such as textiles, are the hardest hit by laws that increase job security while capital-intensive industries are most affected by higher labor dispute resolution costs. The paper concludes that widespread and increasing use of contract labor may have brought some output and employment gains but did not make up for the adverse effects of job security and dispute resolution laws. |
| Keywords: | Labor Markets,Labor Standards,Labor Management and Relations,Public Sector Regulation,Legal Products |
| Date: | 2007–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4259&r=reg |
| By: | Dmitri V. Vinogradov (University of Heidelberg, Department of Economics) |
| Abstract: | The paper examines the effects of ambiguity in regulation on the equilibrium allocation. Under ambiguous bailout policy, agents’ suffer from a lack of information with regards to the insolvency resolution method, which would be chosen by the regulator if a financial institution fails. In this case, beliefs of bankers regarding whether an insolvent bank is liquidated, may differ from those of depositors. The beliefs may be asymmetric even if bankers and depositors possess absolutely symmetric information about the policy of the regulator. It is shown that such asymmetry in beliefs can generate an allocative inefficiency of the bank based economy. |
| Keywords: | bank bailouts; constructive ambiguity; decision-making, uncertainty |
| JEL: | G28 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0442&r=reg |
| By: | Djumashev, R |
| Abstract: | Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effects of this uncertainty, a stochastic dynamic growth model with the public sector is examined. It is shown that deterministic excessive red tape and corruption deteriorate the growth potential through income redistribution and public sector inefficiencies. Most importantly, it is demonstrated that the increase in corruption via higher uncertainty exerts adverse effects on capital accumulation, thus leading to lower growth rates. |
| Keywords: | Corruption; growth; public goods; tax evasion; uncertainty |
| JEL: | E20 O16 O41 D92 D72 E60 H26 G11 H41 |
| Date: | 2007–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3716&r=reg |
| By: | Julien Pierre Chevallier |
| Abstract: | In international emissions trading schemes such as the Kyoto Protocol and the European Union Emissions Trading Scheme, the suboptimal negotiation of the cap with respect to total pollution minimization leads us to critically examine the proposition that generous allocation of grandfathered permits by the regulator based on recent emissions might pave the way for dominant positions. Stemming from this politically given market imperfection, this paper develops a differential Stackelberg game with two types of noncooperative agents: a large potentially dominant agent and a competitive fringe whose size are exogenously determined. The strategic interactions are modelled on an intra-industry permits markets where agents can freely bank and borrow permits. This paper contributes to the debate on initial permits allocation and market power by focusing on the effects of allowing banking and borrowing. A documented appraisal on whether or not such provisions should be included is frequently overlooked by the debate to introduce the permits market itself among other environmental regulation tools. Results are presented under perfect information. |
| Keywords: | emissions trading, banking borrowing, market power |
| JEL: | C73 L11 Q52 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2007-18&r=reg |
| By: | Gersbach, Hans; Wenzelburger, Jan |
| Abstract: | We investigate the question of whether sophistication in risk management fosters banking stability. We compare a simple banking system in which an average rating is used with a sophisticated banking system in which banks are able to assess the default risk of entrepreneurs individually. Both banking systems compete for deposits, loans, and bank equity. While a sophisticated system rewards entrepreneurs with low default risks by low loan interest rates, a simple system acquires more bank equity and finances more entrepreneurs. Expected repayments in a simple system are always higher and its default risk is lower if productivity is sufficiently high. Expected aggregate consumption of entrepreneurs, however, is higher in a sophisticated banking system. |
| Keywords: | banking regulation; Financial intermediation; macroeconomic risks; rating; risk management; risk premia |
| JEL: | D40 E44 G21 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6353&r=reg |
| By: | Buccirossi, Paolo; Spagnolo, Giancarlo |
| Abstract: | This chapter examines the relationship between corporate governance and competition, particularly with regard to cartel formation, and discusses how corporate governance and firm agency problems affect optimal law enforcement against cartels, both in terms of sanctions and leniency policies. Many of the conclusions appear applicable, with minor changes, to non-antitrust forms of collusion, such as collusion between auditors and management, and more generally to corporate and organized crime. |
| Keywords: | Amnesty; Antitrust; Cartels; CEO compensation; Collusion; Corporate crime; Corporate fraud; Corporate governance; Corporate liability; Corruption; Deterrence; Employee liability; Fines; Immunity; Imprisonment; Indemnification; Judgement proofness; Leniency; Managerial incentives; Optimal sanctions; Rewards; Whistleblowers |
| JEL: | G30 K00 L20 L40 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6349&r=reg |
| By: | Anger, Niels; Böhringer, Christoph; Moslener, Ulf |
| Abstract: | This paper quantifies the macroeconomic impacts of the Clean Development Mechanism (CDM) under the Kyoto Protocol based on a computable general equilibrium (CGE) model of international trade and energy use. Employing project-based CDM supply data we assess the relative importance of transaction costs and investment risks as well as CDM regulations through supplementarity and additionality criteria. Our numerical results show that the macroeconomic impacts of transaction costs and investment risks are negligible: Given the large supply of cheap project-based emissions credits in developing countries, compliance to the Kyoto Protocol can be achieved at a very low cost. However, regulatory restrictions such as a supplementarity criterion can substantially curtail the potential efficiency gains from where-flexibility in climate policy. |
| Keywords: | Kyoto Protocol, Emissions Trading, Clean Development Mechanism, Computable General Equilibrium |
| JEL: | C68 D61 Q56 Q58 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5589&r=reg |
| By: | Basak Bayramoglu (Paris-Jourdan Sciences Economiques et Centre d'Economie de la Sorbonne) |
| Abstract: | This paper studies the link between the design of international environmental agreements and the incentives for the private sector to invest in cleaner technologies. More specifically, it compares the performance, in the Paretoo sense, of two types of agreement : an agreement on a uniform standard with transfers and an agreement on differentiated standards without transfers. To achieve this goal, we use a multi-stage game where the private sector anticipates its irreversible investment given the expected level of abatement standards, resulting from future bilateral negotiations. Our findings indicate that whenever countries are able to partially commit, the agreement on a uniform standard may be preferable, as it creates greater incentives for firms to invest in costly abatement technology. This result relies on the low level of the set-up cost of this technology. If this level is sufficiently high, the announcement and implementation of the agreement on a uniform standard with transfers is not optimal, because it takes away the incentive of all firms to invest in a new abatement technology. |
| Keywords: | Agreements, standards, transfers, technology adoption, irreversible investment, bargaining, transboundary pollution. |
| JEL: | Q50 C71 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v07030&r=reg |