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on Regulation |
| By: | José De Gregorio |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchep:37&r=reg |
| By: | Gorecki, Paul K. |
| Abstract: | The October 2009 Government Statement on Economic Regulation issued proposes a number of sensible reforms that are likely to improve regulatory performance in energy, airports, telecommunications, postal services and transport. However, the Government Statement also proposes to reduce the independence of regulators by holding them to account through a whole series of additional mechanisms, some of which are informal and lack transparency, while at the same time instructing regulators to take into account evolving/current ? possible transient ? priorities. There are good reasons for preserving and strengthening rather than undermining regulatory independence. For example, it facilitates investment in long-lived assets with a large element of sunk or irrecoverable investment, a common characteristic of network sectors. The Government Statement's unexplained move to reduce regulators' independence finds no support in either the government commissioned background report prepared by the Economic Intelligence Unit, Review of the Regulatory Environment in Ireland, or recent European Union legislation on energy and telecommunications regulation. Indeed, these sources are strongly in favour of regulatory independence. Two, not necessarily mutually exclusive explanations, for reducing regulatory independence are discussed: to remove an anomaly in the Irish political system; and, to assist in the delivery of social partnership. The paper concludes by arguing that some thought might be given to public consultation of the reforms in the Government Statement prior to further implementation. |
| Keywords: | European Union/investment/Ireland/postal services/regulation/transport |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp373&r=reg |
| By: | Xavier Vives |
| Abstract: | I review the state of the art of the academic theoretical and empirical literature on the potential trade-off between competition and stability in banking. There are two basic channels through which competition may increase instability: by exacerbating the coordination problem of depositors/investors on the liability side and fostering runs/panics, and by increasing incentives to take risk and raise failure probabilities. The competition-stability trade-off is characterized and the implications of the analysis for regulation and competition policy are derived. It is found that optimal regulation may depend on the intensity of competition. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:576&r=reg |
| By: | Bushnell, James; Mansur, Erin T.; Chong, Howard G. |
| Abstract: | We investigate the effect of cap-and-trade regulation of CO2 on firm profits by performing an event study of a CO2 price crash in the EU market. We examine returns for 90 stocks from carbon intensive industries and 600 stocks in the broad EUROSTOXX index. Firms in carbon intensive, or electricity intensive industries, but not involved in international trade were most hurt by the event. This implies investors were focused on product price impacts, rather than compliance costs. We find evidence that firms’ net allowance positions also strongly influenced the share price response to the decline in allowance prices. |
| Keywords: | Emissions Markets; Incidence of Taxation; Event Study |
| JEL: | G14 H22 H23 Q50 Q54 |
| Date: | 2010–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:32737&r=reg |
| By: | Carlo Brambilla (Department of Economics, University of Insubria, Italy) |
| Keywords: | Investment banking; Fnancial innovation; institutions and regulation; Italy |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ins:quaeco:qf1111&r=reg |
| By: | Franklin Allen; Elena Carletti |
| Abstract: | Until Lehman Brothers' bankruptcy in September 2008, the conventional wisdom was that the crisis was the result of problems in the financial sector. However, after the dramatic falls in industrial production in countries such as Japan and Germany starting in the last quarter of 2008, it became clear that the origins of the crisis were deeper. This paper argues that there was an economic crisis that was due to the bursting of a property and stock bubble in the US and a number of other countries. Just as in Japan in the 1990's, this greatly affected the real economy. The problems in the financial system were a symptom rather than a cause, but there was a strong feedback effect into the real economy. The structure of the global financial system and the nature of banking regulation have been severely inadequate. The paper suggests reforms in the structure of the IMF, the governance of central banks and the form of banking regulation. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:575&r=reg |
| By: | Mélise Jaud (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, World Bank - Banque Mondiale - France) |
| Abstract: | I develop a simple dynamic model of reputation-based transactions between a buyer in one country and a supplier in another. I use the model to study the impact of a more stringent regulation on the buyer optimal purchase volume within an existing buyer-seller partnership. A more stringent standard affects the volume of trade in two intuitive ways: directly, a stricter standard affects the supply of quality goods and indirectly through reputation. I refer to the former effect as the regulation effect, and to the latter as the reputation effect. I show that, whereas most of the empirical literature has so far assumed that more stringent standards would be likely to reduce trade, the net effect is in fact non-monotone, even without taking into account endogenous technological upgrading in the supplier country. It varies with the belief the buyer holds about his seller at the time the change in regulation takes place. For both very low and very high seller's reputation, the reputation effect is negligible vis-à-vis the regulation effect. For intermediate levels of the supplier's reputation, reputation has the power to significantly mitigate the direct negative effect of a more stringent sanitary standard on trade. This result has significant implications for developing countries, for which access to developed countries markets is by and large, said to be disproportionately constrained by stricter standards. |
| Keywords: | Product quality ; food safety ; reputation ; agricultural trade |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00586310&r=reg |
| By: | Anthoff, David; Rose, Steven K.; Tol, Richard S. J.; Waldhoff, Stephanie |
| Abstract: | The social cost of carbon is an estimate of the benefit of reducing CO2 emissions by one ton today. As such it is a key input into cost-benefit analysis of climate policy and regulation. We provide a set of new estimates of the social cost of carbon from the integrated assessment model FUND 3.5 and present a regional and sectoral decomposition of our new estimate. China, Western Europe and the United States have the highest share of harmful impacts, with the precise order depending on the discount rate. The most important sectors in terms of impacts are agriculture and increased energy use for cooling. We present an extensive sensitivity analysis with respect to the discount rate, equity weights, different socio economic scenarios and values for the climate sensitivity parameter. |
| Keywords: | cost/Social cost of carbon/cost-benefit analysis/Climate policy/Policy/regulation/decomposition/europe/impacts/discount rate/energy use/equity/scenarios |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp375&r=reg |
| By: | Devitt, Conor; Diffney, Seán; Fitz Gerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan |
| Abstract: | In this paper we analyse the 2008 electricity price in the Irish All-Island Market. We test whether this price is 'efficient' by comparing it to the electricity price in Great Britain. This analysis suggests that around ?16 per MWh of the difference in wholesale prices between Ireland and Britain is due to differences in generating technology. The new wholesale electricity market for the island of Ireland appears to be working well ? it is producing a wholesale price that approximates the long run marginal cost that would apply in a large liquid competitive market. In the British market the wholesale price appears to be below the long run marginal cost of producing electricity. Retail margins in Great Britain are high, especially for households. Only some of this margin compensates vertically integrated utilities for the low wholesale price. In the Republic of Ireland the retail margin was probably also higher than it should have been. |
| Keywords: | electricity/Ireland/cost/Republic of Ireland |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp372&r=reg |
| By: | Polborn, Sarah (Department of Economics, Aarhus School of Business) |
| Abstract: | The costs of the current suboptimal carbon abatement policy are likely in the range of 3 to 6 trillion 2005 US dollars. Using methods from the political economy of environmental policy, the paper develops a new carbon abatement policy instrument, carbon securities. A carbon security entitles its owner to a fixed proportion of ex ante unknown total emissions. This creates an additional group of stakeholders on the side of the issue that has traditionally been underrepresented. The advantages over existing systems include an equilibrium carbon price closer to the social optimum, a more predictable environmental policy, and higher investment in abatement technology |
| Keywords: | Carbon abatement; environmental policy; global warming; interest groups; lobbying; policy instrument design; political process |
| JEL: | D72 Q54 Q58 |
| Date: | 2011–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_019&r=reg |
| By: | Bushnell, James |
| Abstract: | Programs where firms sell emissions ``offsets'' to reduce their emissions continue to provide important complementsto traditional environmental regulations. However in many cases, particularly with current and prospective climate change policy, they continue to be very controversial. The problem of adverse selection lies at the heart of this controversy, as critics of offset programs continue to produce evidence that these projects are paying firms for actions they would have undertaken anyway, and are not producing ``additional'' reductions. This paper explores the theoretical sources of non-additional offsets. An important distinction arises between sales that indicate adverse selection and those that reveal information about aggregate emissions levels. |
| Keywords: | adverse selection; Emissions Markets; Offsets; Climate Policy |
| JEL: | G12 Q50 |
| Date: | 2011–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:32736&r=reg |
| By: | Jorge H. García; Matthew T. Heberling; Hale W. Thurston |
| Abstract: | Many kinds of water pollution occur in pulses, e.g., agricultural and urban runoff. Ecosystems, such as wetlands, can serve to regulate these pulses and smooth pollution distributions over time. This smoothing reduces total environmental damages when the “instantaneous” damage function is convex. This paper introduces a water quality trading model between a farm (a pulse-pollution source) and a firm (a more steady pollution source) where the object of exchange is the ‘temporary’ retention of runoff as opposed to total runoff reductions. The optimal trading ratio requires firm emissions to be offset by more than a proportional retention of the initial agricultural runoff pulse. The reason is twofold: a) emissions are steady over time and -in this sense- have relatively larger environmental impact, and b) certain kinds of runoff management cause otherwise inexistent delayed environmental damages. |
| Date: | 2010–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:008292&r=reg |
| By: | James Alm (Department of Economics, Tulane University); H. Spencer Banzhaf (Department of Economics, Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | When external effects are important, markets will be inefficient, and economists have considered several broad classes of economic instruments to correct these inefficiencies. However, the standard economic analysis has tended to take the region, and the government, as a given; that is, this work has neglected important distinctions and interactions between the geographic scope of different pollutants, the enforcement authority of various levels of government, and the fiscal responsibilities of the various levels of government. It typically ignores the possibility that the externality may be created and addressed by local governments, and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems. This paper examines the implications of decentralization for the design of corrective policies; that is, how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services and to choose tax instruments that can both finance these expenditures and correct the market failures of externalities? |
| Keywords: | market failure, environmental federalism, externalities, fiscal decentralization, subsidiarity principle, economic instruments |
| JEL: | H2 H4 H7 Q5 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:1104&r=reg |
| By: | Goux, Dominique (CREST-INSEE); Maurin, Eric (Paris School of Economics); Petrongolo, Barbara (London School of Economics) |
| Abstract: | We investigate spillovers in spousal labour supply exploiting independent variation in hours worked generated by the introduction of the shorter workweek in France in the late 1990s. We find that female and male employees treated by the shorter legal workweek reduce their weekly labour supply by about 2 hours, and do not experience any reduction in their monthly earnings. While wives of treated men do not seem to adjust their working time at either the intensive or extensive margins, husbands of treated wives respond by cutting their workweek by about half an hour to one hour, according to specifications and samples. In particular, managers and professionals respond much more strongly to the shorter legal workweek in their wives’ firms than men in lower occupations. These effects are consistent with the presence of significant cross-hour effects on labour supply for husbands, though not for wives. |
| Keywords: | spill-over effects, labour supply, workweek reduction |
| JEL: | J22 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5639&r=reg |
| By: | Sedjo, Roger A. (Resources for the Future) |
| Abstract: | Biomass, a renewable energy source, has been viewed as “carbon neutral”—that is, its use as energy is presumed not to release net carbon dioxide. However, this assumption of carbon neutrality has recently been challenged. In 2010 two letters were sent to the Congress by eminent scientists examining the merits—or demerits—of biomass for climate change mitigation. The first, from about 90 scientists (to Nancy Pelosi and Harry Reid, from W.H. Schlesinger et al. May 17, 2010), questioned the treatment of all biomass energy as carbon neutral, arguing that it could undermine legislative emissions reduction goals. The second letter, submitted by more than 100 forest scientists (to Barbara Boxer et al. from Bruce Lippke et al. July 20, 2010), expressed concern over equating biogenic carbon emissions with fossil fuel emissions, as is contemplated in the Environmental Protection Agency’s Tailoring Rule. It argued that an approach focused on smokestack emissions, independent of the feedstocks, would encourage further fossil fuel energy production, to the long-term detriment of the atmosphere. This paper attempts to clarify and, to the extent possible, resolve these differences. |
| Keywords: | carbon neutrality, biomass, wood biomass, bioenergy, carbon dioxide, feedstock, energy, alternative fuel, rational expectations |
| JEL: | Q2 Q23 Q4 Q42 Q5 |
| Date: | 2011–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-11-15&r=reg |
| By: | Miguel Ricaurte |
| Abstract: | Why did services become the dominant sector in industrialized economies? While abundant literature exists on the transition from agriculture to industry (i.e., the industrial revolution), there is no consensual explanation for the second wave of structural change. I argue that sectoral differences in regulation affecting the degree of competition in labor and goods markets explain: (a) the rise in the services sector share of output and employment, (b) international differences in cross-sector structure, and (c) changes in relative wages among sectors. Using evidence on market imperfections, I calibrate a two-sector model where household unions bargain with firms for wages. The least competitive sector pays higher wages, and employment is restricted accordingly. The model produces time series consistent with the “service revolution” as experienced in the Unites States and European economies between 1950 and 2000. In particular, while generating changes in shares of output and employment, the model offers an explanation for relative wage differences, which the standard literature fails to capture. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:584&r=reg |
| By: | Edgar Villa; Jorge A. Restrepo |
| Abstract: | This paper aims to fill a gap in the assessment of armed violence reduction programming by evaluating the impact of a ban on gun-carrying licenses in Colombia. Exploiting regional and temporal variations, and controlling by enforcement levels we found a large and significant violence reduction impact, both in terms of firearm homicides and firearms-related intentional injuries. These positive effects seem to diminish as time passes by and rely on continuous and significant enforcement of the restriction. This gun control intervention operates by extending law enforcement to previously uncontrolled territories and periods, thus increasing gun availability costs for violent criminals. |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:008298&r=reg |
| By: | Curwen, Reece; Mugera, Amin W.; White, Ben |
| Abstract: | This paper investigates whether deregulation of the Australian wheat export market induced a structural change in the price data generation process. We examine the unit root properties of Western Australian wheat prices by testing for the possibility of single and double structural breaks in the price series. Daily prices for the period 20th of May 2003 to 14th of September 2010 are used. We find that the wheat price series has a unit root with two structural breaks but neither break coincided with the time when the Wheat Export Marketing Act 2008 came into effect on 1 July 2008. We conclude that change in local market behaviour would have started prior to actual deregulation with subsequent effect on local price. |
| Keywords: | deregulation, unit root, structural breaks, wheat price, Agribusiness, Demand and Price Analysis, Marketing, Q13, Q18, |
| Date: | 2011–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:102023&r=reg |