nep-reg New Economics Papers
on Regulation
Issue of 2007‒08‒08
twenty-one papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. Services Trade and Domestic Regulation By henk Kox; Hildegunn Kyvik Nordas
  2. Is the World Flat? Differential Regulation of Domestic and Foreign-Owned Firms By Elizabeth Asiedu; Hadi Salehi Esfahani
  3. Regulatory Reform and Market Openness:: Processes to Assess Effectively the Trade and Investment Impact of Regulation By David Shortall
  4. Voluntary Environmental Regulation in Developing Countries: Mexico's Clean Industry Program By Blackman, Allen; Lahiri, Bidisha; Pizer, William A.; Planter, Marisol Rivera; Piña, Carlos Muñoz
  5. The Impact of Pro-Competitive Reforms on Trade in Developing Countries By Sébastien Miroudot; Enrico Pinali; Nicolas Sauter
  6. Do Households Benefit from Financial Deregulation and Innovation? The Case of the Mortgage Market By Kristopher Gerardi; Harvey S. Rosen; Paul Willen
  7. Evaluating the real effect of bank branching deregulation - comparing contiguous counties across U.S. state borders By Rocco R. Huang
  8. Complementary research strategies, first-mover advantage and the inefficiency of patents By Luigi Bonatti
  9. Size and Development of the Shadow Economy and of Do-it-Yourself Activities: The Case of Germany By Andreas Buhn; Alexander Karmann; Friedrich Schneider
  10. Environmental Policy, Innovation and Performance : New Insights on the Porter Hypothesis By Paul Lanoie; Jérémy Laurent-Lucchetti; Nick Johnstone; Stefan Ambec
  11. Tax Effort: The Impact of Corruption, Voice and Accountability By Richard M. Bird; Jorge Martinez-Vazquez; Benno Torgler
  12. State Age Protection Laws and the Age Discrimination in Employment Act By Joanna Lahey; ; ;
  13. Predatory States and Failing States: An Agency Perspective By Avinash Dixit
  14. Integration through de-legislation? An irritated heckler By Joerges, Christian
  15. Pharmaceutical Pricing and Reimbursement Policies in Switzerland By Valérie Paris; Elizabeth Docteur
  16. Fees in an Imperfect World: An Application to Motor Vehicle Emissions By Ando, Amy; Harrington, Winston; McConnell, Virginia D.
  17. The Optimal Capital Structure of Banks: Balancing Deposit Insurance, Capital Requirements and Tax-Advantaged Debt By John P. Harding; Xiaozhing Liang; Stephen L. Ross
  18. United States Courts and the Optimal Deterrence of International Cartels: A Welfarist Perspective on Empagran By Alvin K. Klevorick; Alan O. Sykes
  19. The economic impact of merger control - what is special about banking? By Elena Carletti; Philipp Hartmann; Steven Ongena
  20. Housing Supply and Land Use Regulation in the Netherlands By Wouter Vermeulen; Jan Rouwendal
  21. How Do Age Discrimination Laws Affect Older Workers? By Joanna Lahey; ; ;

  1. By: henk Kox; Hildegunn Kyvik Nordas
    Abstract: This paper argues that regulatory measures affect the fixed cost of entering a market as well as the variable costs of servicing that market. Moreover, differences in regulation among countries often imply that firms have to incur entry costs in every new market. Indicators of regulatory intensity and heterogeneity are introduced in a gravity model and their impact on market entry and subsequent trade flows estimated for total services, business services and financial services. It is found that regulatory heterogeneity has a relatively large negative impact on both market entry and subsequent trade flows. Further, regulatory barriers have a negative effect on the local services sectors’ export performance. Finally it is found that regulations that aims at correcting market failure can have a positive impact on trade. It is concluded that services trade liberalization and regulatory reforms are complementary in creating competitive services markets.
    Date: 2007–02–14
  2. By: Elizabeth Asiedu (Department of Economics, The University of Kansas); Hadi Salehi Esfahani (Department of Economics, University of Illinois, Urbana-Champaign)
    Abstract: This paper examines the determinants of differential employment restrictions applied to foreign vs. domestic firms. We develop a model of employment regulation and test its implications using data from the World Bank's World Business Environment Survey, conducted in 1999/2000. We find that while democratic accountability, corruption, and British legal origin reduce the extent of government intervention in firms' employment decision, they give greater advantage to domestic relative to foreign investors. Rule of law, on the other hand, has a more even effect. Better investment opportunities in the country enhance the government's bargaining power vis-à-vis investors and increase employment intervention, especially in foreign firms engaged in less tradable sectors. We also identify a host of other factors that influence employment restrictions, though none of them entail a differential impact on foreign investors. We find that after controlling for other factors, foreign investors in Latin America face a greater regulatory disadvantage vis-à-vis locals compared to other regions of the world, though this is partly counterbalanced by other effects captured in the model.
    Keywords: Employment Regulation, Foreign Direct Investment, Political Economy.
    JEL: L5 F23 O2
    Date: 2007–07
  3. By: David Shortall
    Abstract: Evidence suggests that differences in regulatory requirements of individual economies may actually impede gains from trade liberalization, while a smooth functioning, transparent regulatory system can have positive effects on trade and investment flows. This has increasingly induced policy makers to pay closer attention to the complementarities and interconnectedness between domestic regulatory reform and market openness. This study focuses on identifying regulatory processes, tools and policies adopted in order to support market openness and improve trade and investment opportunities. Although the elaboration of a market openness assessment toolkit is still at early stages, a number of promising approaches do come out, even if a number of issues call for further attention and work, on which the trade policy community might wish to focus in the future.
    Date: 2007–02–09
  4. By: Blackman, Allen (Resources for the Future); Lahiri, Bidisha; Pizer, William A. (Resources for the Future); Planter, Marisol Rivera; Piña, Carlos Muñoz
    Abstract: Because conventional command-and-control environmental regulation often performs poorly in developing countries, policymakers are increasingly experimenting with alternatives, including state-sponsored voluntary regulatory programs that provide incentives, but not mandates, for pollution control. Although the literature on this trend is quite thin, research in industrialized countries suggests that voluntary programs are sometimes ineffective because they mainly attract relatively clean participants seeking to free-ride on unrelated pollution control investments. We use plant-level data on more than 60,000 facilities to identify the drivers of participation in the Clean Industry Program, Mexico’s flagship voluntary regulatory initiative. Our results suggest that the threat of regulatory sanctions drives participation in the program. Therefore, the program does appear to attract relatively dirty firms. We also find that plants that sold their goods in overseas markets and to government suppliers, used imported inputs, were relatively large, and were in certain sectors and states were more likely to participate in the program, all other things equal.
    Keywords: voluntary environmental regulation, duration analysis, Mexico
    JEL: Q56 Q58 O13 O54 C41
    Date: 2007–07–11
  5. By: Sébastien Miroudot; Enrico Pinali; Nicolas Sauter
    Abstract: This report proposes an analysis of the mutually reinforcing relationship between trade, investment and competition policies and how together they impact trade in developing countries. An index of pro-competitive reforms is provided for 82 countries over the period 2001-2005. The index synthesises 13 indicators of the policy stance of countries with regard to trade, investment and competition. It is then used in quantitative analysis to determine the impact of barriers to competitive markets on trade. The results shows that there are substantial gains for developing countries in market and regulatory reforms in terms of higher trade flows and higher income per capita. Moreover, the paper further examines pro-competitive reforms in key services sectors and the extent to which trade agreements can promote them through the experience of the WTO telecoms Reference Paper. The analysis highlights that countries achieved a high degree of liberalisation in the telecoms sector and that regulatory principles of the Reference Paper were useful in promoting sound policies under domestic regulatory reforms of the sector.
    Keywords: telecommunications, regulatory reforms, indicators, trade liberalisation, trade and competition, trade and investment, pro-competitive reforms, gravity, reference paper, telecoms, gains
    JEL: F12 F14 L50 L96
    Date: 2007–06–15
  6. By: Kristopher Gerardi (Federal Reserve Bank of Boston); Harvey S. Rosen (Princeton University); Paul Willen (Federal Reserve Bank of Boston)
    Abstract: The U.S. mortgage market has experienced phenomenal change over the last 35 years. Most observers believe that the deregulation of the banking industry and financial markets generally has played an important part in this transformation. This paper develops and implements a technique for assessing the impact of changes in the mortgage market on individuals and households. Our analysis is based on an implication of the permanent income hypothesis: that the higher a household’s future income, the more it desires to spend and consume, ceteris paribus. If we have perfect credit markets, then desired consumption matches actual consumption and current spending on housing should forecast future income. Since credit market imperfections mute this effect, we can view the strength of the relationship between housing spending and future income as a measure of the “imperfectness” of mortgage markets. Thus, a natural way to determine whether mortgage market developments have actually helped households by decreasing market imperfections is to see whether this link has strengthened over time. We implement this framework using panel data going back to 1969. We find that over the past several decades, housing markets have become less imperfect in the sense that households are now more able to buy homes whose values are consistent with their long-term income prospects. One issue that has received particular attention is the role that the housing Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, have played in improving the market for housing finance. We find no evidence that the GSEs’ activities have contributed to this phenomenon. This is true whether we look at all homebuyers, or at subsamples of the population whom we might expect to benefit particularly from GSE activity, such as lowincome households and first-time homebuyers.
    JEL: D14 G21 R21
    Date: 2007–03
  7. By: Rocco R. Huang (University of Amsterdam, and European Central Bank. Correspondence address: European Central Bank, DG-R/FIRD, Kaiserstrasse 29, D-60311, Frankfurt am Main, Germany.)
    Abstract: This paper proposes a new methodology to evaluate the economic effect of state-specific policy changes, using bank-branching deregulations in the U.S. as an example. The new method compares economic performance of contiguous counties on opposite sides of state borders, where on one side restrictions on statewide branching were removed relatively earlier, to create a natural “regression discontinuity” setup. The study uses a total of 285 pairs of contiguous counties along 38 segments of such regulation change borders to estimate treatment effects for 23 separate deregulation events. To distinguish real treatment effects from those created by data-snooping and spatial correlations, fictitious placebo deregulations are randomized (permutated) on another 32 segments of non-event borders to establish empirically a statistical table of critical values for the estimator. The method determines that statistically significant growth accelerations can be established at a >90% confidence level in five out of the 23 deregulation events examined. “Hinterland counties” within the still-regulated states, but farther away from the state borders, are used as a second control group to consider and reject the possibility that cross-border spillover of deregulation effects may invalidate the empirical design. JEL Classification: G21, G28, O43.
    Keywords: Banking deregulation, Economic growth, Regression discontinuity.
    Date: 2007–07
  8. By: Luigi Bonatti
    Abstract: In a realistic framework where the potential innovators’ research lines are imperfectly correlated and imitation takes some time, this paper studies an industry regulated by an authority which can tax (subsidize) the firms’ pure profits (R&D expenditures). By comparing the market equilibrium emerging when there is patent protection with the market equilibrium emerging without patents, the paper finds that social welfare is higher in the absence of patents. This result is driven by the fact that—without patents--more than one successful inventor may implement its discovery and enter the market, thus reducing the deadweight loss due to imperfect competition.
    Keywords: Innovation, temporary monopoly, lead time, market regulation, patents.
    JEL: H21 H25 L10 L51 O31
    Date: 2007
  9. By: Andreas Buhn; Alexander Karmann; Friedrich Schneider
    Abstract: This paper presents the first MIMIC (multiple indicator multiple causes) model estimate of the size and development of the shadow economy and of do-it-yourself (DIY) activities in Germany from 1970 to 2005. By 2005, they reached a level of about 17% and 4.94%. While the shadow economy has regularly increased over the years, DIY activities – though quite sizeable – have remained more or less constant since the early 1990s. The driving forces for the shadow economy are regulation and tax burden whereas for DIY activities, the level of unemployment is the main factor.
    Keywords: Shadow economy; Do-it-yourself activities; Tax burden; Regulation; Domestic currency in circulation; Unemployment; MIMIC models
    JEL: O17 O5 D78 H2 H11 H
    Date: 2007–06
  10. By: Paul Lanoie (IEA, HEC Montréal); Jérémy Laurent-Lucchetti; Nick Johnstone; Stefan Ambec
    Abstract: Jaffe and Palmer (1997) present three distinct variants of the so- called Porter Hypothesis. The “weak” version of the hypothesis posits that environmental regulation will stimulate certain kinds of environmental innovations. The “narrow” version of the hypothesis asserts that flexible environmental policy regimes give firms greater incentive to innovate than prescriptive regulations, such as technology-based standards. Finally, the “strong” version posits that properly designed regulation may induce cost-saving innovation that more than compensates for the cost of compliance. In this paper, we test the significance of these different variants of the Porter Hypothesis using data on the four main elements of the hypothesised causality chain (environmental policy, research and development, environmental performance and commercial performance). The analysis is based upon a unique database which includes observations from approximately 4200 facilities in seven OECD countries. In general, we find strong support for the “weak” version, qualified support for the “narrow” version, and qualified support for the “strong” version as well.
    Keywords: Porter hypothesis, environmental policy, innovation, environmental performance, business performance.
    JEL: L21 M14 Q52 Q55 Q58
    Date: 2007–06
  11. By: Richard M. Bird; Jorge Martinez-Vazquez; Benno Torgler
    Abstract: In this paper we argue that a more legitimate and responsive state is an essential factor for a more adequate level of tax effort in developing countries. While at first glance giving such advice to poor countries seeking to increase their tax ratios may not seem more helpful than telling them to find oil, it is presumably more feasible for people to improve their governing institutions than to rearrange nature’s bounty. Improving corruption, voice and accountability may not take longer nor be necessarily more difficult than changing the opportunities for tax handles and economic structure. The key contribution of this paper is to extend the conventional model of tax effort by showing that not only do supply factors matter, but that demand factors such as corruption, voice and accountability also determine tax effort to a significant extent.
    Keywords: Tax effort; tax reforms; developing countries; Latin America; corruption; voice and accountability
    JEL: H11 H20 O17
    Date: 2007–07
  12. By: Joanna Lahey; (National Bureau of Economic Research); ;
    Abstract: Some anti-discrimination laws have the perverse effect of harming the very class they were meant to protect. This paper provides evidence that age discrimination laws belong to this perverse class. It exploits an unusual aspect of the policy for enforcement of the federal 1968 Age Discrimination in Employment Act (ADEA), which made filing an age discrimination claim less burdensome in some states than in others. After the enforcement of the federal law, white male workers over age 50 in states where the federal government allowed 300 days to file a discrimination complaint worked between 1 and 1.5 fewer weeks per year than did workers in states without laws. These men were also .3 percentage points more likely to be retired and .2 percentage points less likely to be hired. These findings suggest that in an anti-age discrimination environment, firms seek to avoid litigation through means not intended by the legislation — by not employing older workers in the first place.
    Keywords: age discrimination, litigation, age protection laws
    Date: 2006–11
  13. By: Avinash Dixit (Princeton University)
    Abstract: In any non-trivial state, policies decided at the top levels of government are administered by middle-level bureaucrats. I examine whether this agency problem can contribute to explaining state failure in matters of provision of public goods. I find some theoretical arguments to support the view that failure is more likely in states whose top rulers have predatory motives. When the bureaucrats’ cost of providing the public good is their private information, rulers must give them incentive rents to achieve truthful revelation. Predatory rulers are less willing to part with such rents; therefore they tolerate more downward distortion in the provision of public goods to reduce the required rent-sharing. When the bureaucrats’ actions are also unobservable, there is a synergistic interaction between more benevolent rulers and more caring or professional bureaucrats. However, these effects manifest themselves differently and to different degrees under different conditions of information. Therefore precise explanations or predictions in individual instances require context-specific analyses.
    Date: 2006–06
  14. By: Joerges, Christian
    Abstract: This paper is about the difficult relationship between law and governance in the European Union. The turn to governance which the Prodi Commission has forcefully propagated is a continuation of much older developments. By means of these developments the European Community (now Union) has sought to compensate for the inadequacies found within its institutional design (in particular, within the Community Method); a design which has had constantly to be adapted to the ever more intense and complex regulatory needs of the integration project. These constant institutional innovations were functional necessities and the turn to governance seems to be irresistible and irreversible. Such innovation, however, is not easily reconcilable with the Union’s commitment to the rule of law, or with the very idea of law-mediated, politically accountable rule. These tensions are addressed in two steps. The first concerns the national level and is a mainly methodological reminder: many of the governing techniques that are today defined as governance can also be found within national systems and were, furthermore, the subject of intensive debate in the 80s within discussion on proceduralizing and reflexive methodologies which sought to capture the specifics of a – then so perceived – post-interventionist law. The second step concerns the European Union. Here, a methodological approach is insufficient. It must instead be accompanied by a re-conceptualisation of European law as a new type of supranational conflict of laws. This law seeks to realize what the Constitutional Treaty had called the “motto of the Union”, namely a reconciliation of “unity and diversity”. It is submitted that a re-conceptualisation of European law in terms of conflict-of-laws would not only help to rescue the rule of law but would also increase our capacity to cope with the unresolved substantive tensions within the European polity.
    Keywords: comitology; Europeanization; governance; multilevel governance; open coordination; private international law; rule of law
    Date: 2007–07–17
  15. By: Valérie Paris; Elizabeth Docteur
    Abstract: This paper examines aspects of the policy environment and market characteristics of the Swiss pharmaceutical sector, and assesses the degree to which Switzerland has achieved certain policy goals. In Switzerland, pharmaceutical spending has not been growing faster than health expenditure as a whole, as has been the case in many other OECD countries. Swiss pharmaceutical spending per capita and as a share of GDP is modest by OECD standards. This in part reflects relatively low levels of pharmaceutical consumption, given that public prices are among the highest in Europe and the Swiss tend to be early adopters of new pharmaceutical products. Switzerland’s regulation of prices for reimbursed drugs, based on referencing across countries and within the therapeutic class for products with comparators, appears to result in prices lower than what would be obtained absent regulation. Although ex-manufacturer prices are somewhat high relative to other European countries, recent reforms have reduced the differential. While costs are under control, Switzerland has scope to improve the cost-effectiveness of its expenditures in the pharmaceutical area. Generic penetration of the market is increasing but falls short of what has been achieved elsewhere and the prices of generic products are higher than what is found in other countries. Relatively high mark-ups over ex-factory prices suggest that the distribution chain is a source of further potential efficiencies, although high costs could also reflect characteristics of the Swiss economy... <BR>Ce document passe en revue différents aspects des politiques et des caractéristiques de marché du secteur pharmaceutique en Suisse et évalue l’atteinte des objectifs relatifs à la politique pharmaceutique suisse. En Suisse, les dépenses pharmaceutiques n’ont pas augmenté plus vite que l’ensemble des dépenses de santé, contrairement ce qui s’est passé dans de nombreux autres pays de l’OCDE. Les dépenses de médicaments par habitant, et en proportion du PIB, restent modérées par rapport à la moyenne des pays de l’OCDE. Cela tient en partie au niveau relativement faible de la consommation pharmaceutique, puisque les prix publics sont parmi les plus élevés en Europe et les Suisses enclins à adopter rapidement les nouveaux produits. La régulation des prix des prix des médicaments remboursés, basée sur des comparaisons internationales et, le cas échéant, sur les prix des comparateurs au sein d’une même classe thérapeutique, semble conduire à des niveaux de prix moins élevés que ce qu’ils seraient sans régulation. Même si les prix fabricants sont relativement élevés par rapport à ce qu’ils sont dans d’autres pays européens, les récentes réformes ont réduit l’écart. Les coûts sont certes maîtrisés mais la Suisse pourrait aller encore plus loin pour améliorer l’efficience de ses dépenses pharmaceutiques. Le taux de pénétration des génériques sur le marché s’améliore mais reste inférieur à ce qu’il est ailleurs et les prix des génériques sont plus élevés que dans d’autres pays. Les marges relativement élevées appliquées sur les prix fabricants donnent à penser que les circuits de distribution pourraient être rationalisés, même si les coûts élevés peuvent aussi refléter certaines caractéristiques de l’économie suisse...
    Keywords: Switzerland, Suisse, pharmaceutical policy, politique pharmaceutique, pricing and reimbursement, pharmaceutical market, marché pharmaceutique
    JEL: I11 I18
    Date: 2007–06–27
  16. By: Ando, Amy; Harrington, Winston (Resources for the Future); McConnell, Virginia D. (Resources for the Future)
    Abstract: This paper compares an emissions fee on measured vehicle emissions rates to a mandatory regulation that requires all vehicles to maintain emissions below a minimum standard. We model the motorist’s decision under the fee policy and simulate the fee and regulatory policies using data from an emissions inspection program that includes test and repair information for more than 50,000 vehicles. Under ideal conditions with perfect information and no subsidies, the fee on emissions rates performs substantially better than the regulatory policy. When more realistic modeling of available information and market conditions are included, there is little difference in the cost and effectiveness of the fee and regulatory programs. In particular, we find that the ability of the polluter to assess the emissions and cost outcomes of is critical importance for the performance of the fee policy.
    Keywords: pollution fees, emissions control, vehicle pollution, inspection and maintenance
    JEL: Q52 Q53 Q58
    Date: 2007–06–06
  17. By: John P. Harding (University of Connecticut); Xiaozhing Liang (State Street Corporation); Stephen L. Ross (University of Connecticut)
    Abstract: The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its costs (e.g., bankruptcy costs). This paper studies the impact and interaction of deposit insurance, capital requirements and tax benefits on a bank's choice of optimal capital structure. Using a contingent claims model to value the firm and its associated claims, we find that there exists an interior optimal capital ratio in the presence of deposit insurance, taxes and a minimum fixed capital standard as long as there is a significant financial burden associated with violating capital requirements. Banks voluntarily choose to maintain capital in excess of the minimum required in order to balance the risks of insolvency (especially to future tax benefits) against the benefits of additional debt. Because our model includes all three contingent claims, our results differ from those of previous studies of the capital structure of banks that have generally found corner solutions (all equity or all debt) to the capital structure problem.
    Date: 2007–07
  18. By: Alvin K. Klevorick (Yale University); Alan O. Sykes (Stanford University)
    Abstract: E. Hoffmann-La Roche Ltd. v. Empagran S.A. concerned a private antitrust suit for damages against a global vitamins cartel. The central issue in the litigation was whether foreign plaintiffs injured by the cartel’s conduct abroad could bring suit in U.S. court, an issue that was ultimately resolved in the negative. We take a welfarist perspective on this issue and inquire whether optimal deterrence requires U.S. courts to take subject matter jurisdiction under U.S. law for claims such as those in Empagran. Our analysis considers, in particular, the arguments of various economist amici in favor of jurisdiction and arguments of the U.S. and foreign government amici against jurisdiction. We explain why the issue is difficult to resolve, and identify several economic concerns, which the amici did not address, that may counsel against jurisdiction. We also analyze the legal standard enunciated by the Supreme Court and applied on remand by the DC Circuit, and we argue that its focus on "independent" harms and "proximate" causation is problematic and does not provide an adequate economic foundation for resolving the underlying legal issues. A revised version of this paper is forthcoming in ANTITRUST STORIES from Foundation Press, edited by Daniel Crane and Eleanor Fox.
    Keywords: Antitrust, Cartels, Competition policy, International trade
    JEL: F13 K21 L41
    Date: 2007–07
  19. By: Elena Carletti (Center for Financial Studies, University of Frankfurt, Merton Str. 17-21, HPF 73, 60325 Frankfurt, Germany.); Philipp Hartmann (European Central Bank, DG Research, Kaiserstraße 29, 60311 Frankfurt, Germany.); Steven Ongena (Tilburg University, Department of Finance, P.O. Box 90153, 5000 LE Tilburg, The Netherlands.)
    Abstract: There is a long-standing debate about the special nature of banks. Based on a unique dataset of legislative changes in industrial countries, we identify events that strengthen competition policy, analyze their impact on banks and non-financial firms and explain the reactions observed with institutional features that distinguish banking from non-financial sectors. Covering nineteen countries for the period 1987 to 2004, we find that banks are special in that a more competition-oriented regime for merger control increases banks’ stock prices, whereas it decreases those of non-financial firms. Moreover, bank merger targets become more profitable and larger. A major determinant of the positive bank returns, after controlling inter alia for the general quality of institutions and individual bank characteristics, is the opaqueness that characterizes the institutional setup for supervisory bank merger reviews. Thus strengthening competition policy in banking may generate positive externalities in the financial system that offset unintended adverse side effects on efficiency introduced through supervisory policies focusing on prudential considerations and financial stability. Legal arrangements governing competition and supervisory control of bank mergers may therefore have important implications for real activity. JEL Classification: G21, G28, D4.
    Keywords: Specialness of banks, mergers and acquisitions, competition policy, legal institutions, financial regulation.
    Date: 2007–07
  20. By: Wouter Vermeulen (CPB, The Hague, and VU University Amsterdam); Jan Rouwendal (VU University Amsterdam)
    Abstract: In spite of a growing recognition of the importance of supply conditions for the level and volatility of house prices, empirical work on housing supply outside the US is scarce. This paper considers various measures of housing supply in the Netherlands, where real house prices have roughly tripled since 1970. Besides the volume of investment in residential structures, and new housing construction in units, we derive time series of structure and location quality in a hedonic analysis. Each of these variables appears to be almost fully inelastic with respect to house prices in at least the short to medium long run. Further analysis of the quality of location index shows that conventional models of competitive land and housing markets cannot account for these findings. However, they may be well explained in terms of the rather extensive body of interventions by the Dutch government.
    Keywords: housing supply; residential investment; housing markets; land use regulation
    JEL: E22 R31 R52
    Date: 2007–07–31
  21. By: Joanna Lahey; (Bush School of Government and Public Service); ;
    Abstract: The federal Age Discrimination in Employment Act (ADEA) prohibits age-based discrimination against older workers through hiring, firing, layoffs, compensation and other conditions of employment. The law covers most workers age 40 and older in firms with 20 or more employees. The question is whether the ADEA and similar state laws have helped or hurt older workers. On the one hand, the legislation may have prevented companies from unfairly dismissing older workers. On the other hand, the fear of lawsuits may have dissuaded employers from hiring older workers. If so, the law would benefit "insiders" who already have jobs but harm "outsiders" seeking employment. This brief discusses the history, mechanics, and impact of age protection laws in the United States. It summarized previous research and presents new findings using data from the Current Population Survey.
    Keywords: age discrimination laws, older workers, insiders, outsiders, hurt, helped, history, mechanics
    Date: 2006–10

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