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on Regulation |
| By: | Kox, Henk L.M.; Nordås, Hildegunn Kyvik |
| 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. |
| Keywords: | Trade in services; regulation; GATS; fixed trade costs |
| JEL: | F12 L8 F13 F14 |
| Date: | 2007–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2116&r=reg |
| By: | Emmanuel Farhi; Mikhail Golosov; Aleh Tsyvinski |
| Abstract: | This paper studies a mechanism design model of financial intermediation. There are two informational frictions: agents receive unobservable shocks and can participate in markets by engaging in trades unobservable to intermediaries. Without regulations, intermediaries provide no risk sharing because of an externality arising from arbitrage opportunities. We identify a simple regulation -- a liquidity requirement -- that corrects such an externality by affecting the interest rate on the markets. We characterize the form of the optimal liquidity adequacy requirement for a general class of preferences. We show that whether markets underprovide or overprovide liquidity, and whether a liquidity cap or a liquidity floor should be used depends on the nature of the shocks that agents experience. Moreover, we prove that the optimal liquidity adequacy requirement implements a constrained efficient allocation subject to unobservable types and trades. We provide closed form solutions for the optimal liquidity requirement and welfare gains of imposing such requirements for two important special cases. In contrast with the existing literature, the necessity of regulation does not depend on exogenous incompleteness of markets for aggregate shocks. |
| JEL: | E6 G18 G2 G28 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12959&r=reg |
| By: | Behrens, Kristian; Gaigné, Carl; Thisse, Jacques-François |
| Abstract: | The aim of this paper is to qualify the claim that regulating a competitive transport sector is always detrimental to consumers. We show indeed that, although transport deregulation is beneficial to consumers as long as the location of economic activity is fixed, this is no longer true when, in the long run, firms and workers are freely mobile. The reason is that the static gains due to less monopoly power in the transport sector may well map into dynamic dead-weight losses because deregulation of the transport sector leads to more inefficient agglomeration. This latter change may, quite surprisingly, increase consumer prices in some regions, despite a more competitive transport sector. Transport deregulation is shown to map into aggregate consumer welfare losses and more inequality among consumers in the long run. |
| Keywords: | economic geography; imperfect competition; interregional trade; transport deregulation; transport sector |
| JEL: | F12 F16 R12 R49 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6185&r=reg |
| By: | Colin Pugh |
| Abstract: | This paper outlines the regulatory framework within which occupational defined benefit pension plans are financed and addresses the challenges facing the funding of such plans. The Appendices include a summary and discussion of the funding regulations in twelve OECD countries plus Brazil – all of which have a long history of DB plans. The paper draws on these experiences in... <P>Règles de financement et méthodes actuarielles <BR>Ce document décrit le cadre réglementaire dans lequel s’insèrent les plans de pensions professionnelles à prestations définies et examine les défis posés par le financement de ces plans. Les appendices sont consacrés à une présentation des règles de financement en vigueur dans 12 pays de l’OCDE plus le Brésil – tous pays qui ont... |
| Keywords: | réglementation, regulation, pension fund, fond de pension, méthodes d'évaluation actuarielles, plans à prestations définies, plans de pensions professionnelles, règle de financement, actuarial costing methods, defined benefit plan, occupational pension plan, funding rule |
| JEL: | G18 G23 J32 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaab:1-en&r=reg |
| By: | Régibeau, Pierre; Rockett, Katharine |
| Abstract: | Innovative activities often are heavily regulated. Reviews conducted by administrative agencies take time and are not perfectly accurate. Of particular concern is whether, by design or not, such agencies discriminate against more important innovations by taking more time to perform their reviews. We study the relationship between the length of patent review and the importance of inventions in a theoretical model. We build a simple model of the US patent review process. The model predicts that, controlling for a patent's position in the new technology cycle, more important innovations would (and should) be approved more quickly. Also, the approval delay is likely to decrease as an industry moves from the early stages of an innovation cycle to later stages. These predictions are in line with the evidence we obtain from a data set of US patents granted in the field of genetically modified crops from 1983 to 1999. Our analysis also helps to reconcile the results on the relationship between importance and delay found in previous studies. |
| Keywords: | genetic modification; innovation; patent policy; regulation |
| JEL: | L43 O31 O32 O33 O34 O38 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6178&r=reg |
| By: | Kristopher Gerardi; Harvey S. Rosen; Paul Willen |
| Abstract: | The U.S. mortgage market has experienced phenomenal change over the last 35 years. This paper develops and implements a technique for assessing the impact of changes in the mortgage market on households. Our framework, which is based on the permanent income hypothesis, that allows us to gauge the importance of borrowing constraints by estimating the empirical relationship between the value of a household's home purchase and its future income. 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 low-income households and first-time homebuyers. |
| JEL: | D14 G21 H89 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12967&r=reg |
| By: | Carl-Fredrik Bergström; Henry Farrell; Adrienne Héritier |
| Keywords: | accountability; European Commission; Council of Ministers; European Parliament; European Parliament |
| Date: | 2006–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0181&r=reg |