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on Regulation |
| By: | AMBEC Stefan; DESQUILBET Marion |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:08.21.265&r=reg |
| By: | Monique Ebell; Christian Haefke |
| Abstract: | We consider the dynamic relationship between product market entry regulation andequilibrium unemployment. The main theoretical contribution is combining a job matchingmodel with monopolistic competition in the goods market and individual bargaining. Wecalibrate the model to US data and perform a policy experiment to assess whether thedecrease in trend unemployment during the 1980's and 1990's could be attributed to productmarket deregulation. Under a traditional calibration, our results suggest that a decrease of lessthan two-tenths of a percentage point of unemployment rates can be attributed to productmarket deregulation, a surprisingly small amount. Under a small surplus calibration,however, product market deregulation can account for the entire decline in US trendunemployment over the 1980's and 1990's. |
| Keywords: | Product market competition, barriers to entry, wage bargaining |
| JEL: | E24 J63 L16 O00 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0874&r=reg |
| By: | Scherer, F. M. (Harvard U) |
| Abstract: | This paper provides an overview on 18 papers presented at a Stanford University conference on the Asian pharmaceutical industries. It begins by putting the contributions and growth of individual national industries in quantitative perspective. Several substantive issues are then addressed: (1) the distortions introduced by the system prevalent in many Asian nations for physicians to secure much of their compensation through the profits from drugs they directly dispense: (2) the effects of government price controls, which among other things encourage emphasis on proliferating minor improvements to existing drugs; (3) the fragmentation of manufacturing industry structure, which leaves too many firms lacking the economies of scale required inter alia to sustain high levels of quality control and which makes regulatory monitoring difficult; (4) the implications of World Trade Organization rules requiring nations to begin issuing pharmaceutical product patents where previously their industries could free-ride on the technological advances of industrialized nations; and (5) whether more Asian pharmaceutical firms can overcome the hurdles to becoming significant technological innovators. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-021&r=reg |
| By: | Ross Levine; Alexey Levkov; Yona Rubinstein |
| Abstract: | This paper assesses the impact of competition on racial discrimination. The dismantling of inter- and intrastate bank restrictions by U.S. states from the mid-1970s to the mid-1990s reduced financial market imperfections and lowered entry barriers facing nonfinancial firms. We use bank deregulation to identify an exogenous intensification of competition in the nonfinancial sector, and evaluate its impact on the racial wage gap, which is that component of the black-white wage differential unexplained by Mincerian characteristics. We find that bank deregulation reduced the racial wage gap by spurring the entry of nonfinancial firms. Consistent with theory, the impact of competition on the wage gap is particularly large in states with a comparatively high degree of racial bias, where competition-enhancing bank deregulation eliminated between 20 and 30 percent of the racial wage gap. |
| JEL: | D3 D43 G21 G28 J31 J7 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14273&r=reg |
| By: | Brian C. Murray; Richard G. Newell; William A. Pizer |
| Abstract: | On efficiency grounds, the economics community has to date tended to emphasize price-based policies to address climate change -- such as taxes or a "safety-valve" price ceiling for cap-and-trade -- while environmental advocates have sought a more clear quantitative limit on emissions. This paper presents a simple modification to the idea of a safety valve: a quantitative limit that we call the allowance reserve. Importantly, this idea may bridge the gap between competing interests and potentially improve efficiency relative to tax or other price-based policies. The last point highlights the deficiencies in several previous studies of price and quantity controls for climate change that do not adequately capture the dynamic opportunities within a cap-and-trade system for allowance banking, borrowing, and intertemporal arbitrage in response to unfolding information. |
| JEL: | D8 L51 Q54 Q58 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14258&r=reg |
| By: | Erel, Isil (Ohio State U) |
| Abstract: | Bank mergers will increase or decrease loan spreads, depending on whether the increased market power outweighs gains in operating efficiency. Using a proprietary loan-level data set for U.S. commercial banks, I find that, on average, mergers reduce loan spreads, and that the reduction is greater for acquirers with larger declines in operating costs post merger. Market overlap between the acquirer and the target leads to more potential for cost savings, which push spreads down. However, if the overlap is significant, the enhanced market power dominates the cost savings and, therefore, spreads increase. The findings are robust to using variation in dates of intrastate banking deregulation as an exogenous instrument for the timing of the in-market mergers. Furthermore, contrary to what might be expected, bigger acquirers do not impose less favorable terms on small businesses. Indeed, the average reduction in spreads is significant for small loans, showing that small borrowers typically pay lower interest rates to banks that have expanded during the previous few years through mergers. |
| JEL: | G21 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2006-19&r=reg |
| By: | Antoni Estevadeordal; Alan M. Taylor |
| Abstract: | According to the Washington Consensus, developing countries? growth would benefit from a reduction in tariffs and other barriers to trade. But a backlash against this view now suggests that trade policies have little or no impact on growth. If "getting policies right" is wrong or infeasible, this leaves only the more tenuous objective of "getting institutions right" (Easterly 2005, Rodrik 2006). However, the empirical basis for judging recent trade reforms is weak. Econometrics are mostly ad hoc; results are typically not judged against models; trade policies are poorly measured (or not measured at all, as when trade volumes are spuriously used); and the most influential studies in the literature are based on pre-1990 experience (which predates the "Great Liberalization" in developing countries which followed the GATT Uruguay Round). We address all of these concerns -- by using a model-based analysis which highlights tariffs on capital and intermediate goods; by compiling new disaggregated tariff measures to empirically test the model; and by employing a treatment-and-control empirical analysis of pre- versus post-1990 performance of liberalizing and nonliberalizing countries. We find evidence that a specific treatment, liberalizing tariffs on imported capital and intermediate goods, did lead to faster GDP growth, and by a margin consistent with theory (about 1 percentage point per annum). Endogeneity problems are considered and other observations are consistent with the proposed mechanism: changes to other tariffs, e.g. on consumption goods, though collinear with general tariffs reforms, are more weakly correlated with growth outcomes; and the treatment and control groups display different behavior of investment prices and quantities, and capital flows. |
| JEL: | E65 F10 F13 F43 F53 N10 N70 O40 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14264&r=reg |
| By: | YongDong Zou (Sany Group); Stephen M. Miller (University of Connecticut and University of Nevada, Las Vegas); Bernard Malamud (University of Nevada, Las Vegas) |
| Abstract: | This paper examines the effects of geographical deregulation on commercial bank performance across states. We reach some general conclusions. First, the process of deregulation on an intrastate and interstate basis generally improves bank profitability and performance. Second, the macroeconomic variables -- the unemployment rate and real personal income per capita -- and the average interest rate affect bank performance as much, or more, than the process of deregulation. Finally, while deregulation toward full interstate banking and branching may produce more efficient banks and a healthier banking system, we find mixed results on this issue. |
| Keywords: | commercial banks, geographic deregulation, bank performance |
| JEL: | E5 G2 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-25&r=reg |