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on Regulation |
| By: | Tsur, Yacov; de Gorter, Harry |
| Abstract: | When a nonpoint source pollution process involves many polluters, each taking his own contribution to aggregate pollution to be negligi- ble, ambient-based policies become ineffective due to lack of strategic interactions between dischargers. We offer a regulation mechanism for this case. The mechanism consists of inter-period and intra-period com- ponents. The first exploits ambient (aggregate) information to derive the optimal pollution and aggregate emission processes and the ensuing social price of emission. The intra-period mechanism takes as given the social price of emission and implements the optimal output-abatement- emission allocation across the heterogenous, privately informed firms in each time period. The mechanism gives rise to the full information outcome when the social cost of transfers is nil. A positive social cost of transfers decreases both output and abatement in each time period, though the effect on emission is ambiguous. |
| Keywords: | Nonpoint source pollution, abatement, stock externality, dynamic regulation, Markov decision process, asymmetric information, Crop Production/Industries, C61, D82, H23, L51, Q58, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:huaedp:122124&r=reg |
| By: | Goodhart, Ch. A. E.; Kashyap, A. K.; Tsomocos, D. P.; Vardoulakis, A. P. |
| Abstract: | This paper explores how different types of financial regulation could combat many of the phenomena that were observed in the financial crisis of 2007 to 2009. The primary contribution is the introduction of a model that includes both a banking system and a “shadow banking system” that each help households finance their expenditures. Households sometimes choose to default on their loans, and when they do this triggers forced selling by the shadow banks. Because the forced selling comes when net worth of potential buyers is low, the ensuing price dynamics can be described as a fire sale. The proposed framework can assess five different policy options that officials have advocated for combating defaults, credit crunches and fire sales, namely: limits on loan to value ratios, capital requirements for banks, liquidity coverage ratios for banks, dynamic loan loss provisioning for banks, and margin requirements on repurchase agreements used by shadow banks. The paper aims to develop some general intuition about the interactions between the tools and to determine whether they act as complements and substitutes. |
| Keywords: | Price setting, changeover, euro, inflation. |
| JEL: | G28 L51 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:372&r=reg |
| By: | James P. Feehan (Memorial University) |
| Abstract: | The Government of Newfoundland and Labrador is assessing whether to authorize the multi-billion dollar Muskrat Falls hydroelectricity project on the lower Churchill River in Labrador. Proponents say it is needed to handle expected increases in electricity consumption. A better first step, however, would be to reform provincial regulations that set artificially low prices for electricity and support excessive power consumption, which is a problem in Newfoundland as it is in other provinces. Changing regulatory regimes so that the price of electricity reflects underlying costs would make economic sense and promote energy conservation. For Newfoundland, such a change could make the expensive Muskrat Falls project unnecessary. |
| Keywords: | Economic Growth and Innovation, Governance and Public Institutions, Water Series, Province of Newfoundland, electricity, hydro, pricing, Newfoundland and Labrador Hydor (NLH), Nalcor Energy, Muskrat Falls Plan (MFP), Isolated Island Option (IIO) |
| JEL: | Q2 L9 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdh:ebrief:129&r=reg |
| By: | Beghin, John C.; David Orden |
| Abstract: | NTMs, Agricultural and Food Trade, and Competitiveness Special Issue of The World Economy (forthcoming). Selected Papers from a European Commission co-funded Project on Assessment the Impacts of Non-tariff Measures on Competitiveness of the EU and Selected Trade Partners. Guest Editors: John Beghin and David Orden. The PDF file has the Table of Contents and teh introduction. Please contact the authors for individual papers. Once the articles are available on line, we will link directly to them.Contents:Overview Key Findings of the NTM-Impact Project David Orden, John Beghin, and Guy Henry The Impact of Regulatory Heterogeneity on Agri-food Trade Niven Winchester, Marie-Luise Rau, Christian Goetz, Bruno Larue, Tsunehiro Otsuki, Karl Shutes, Christine Wieck, Heloisa Lee Burnquist, MaurÃcio Jorge Pinto de Souza, and Rosane Nunes de Faria Convergence of US and EU Production Practices under the New FDA Food Safety Modernization Act John Humphrey Case Studies The Trade and Welfare Impacts of Australian Quarantine Policies: The Case of Pigmeat John Beghin and Mark Melatos Potential of Regional and Seasonal Requirements in US Regulation of Fresh Lemon Imports Caesar Cororaton and Everett Peterson Assessment of the Impact of Avian Influenza Related Regulatory Policies on Poultry Meat Trade and Welfare Christine Wieck, Simon Schlueter and Wolfgang Britz Compositional Standards, Import Permits and Market Structure: The Case of Canadian Cheese Imports Marie-Hélène Felt, Bruno Larue and Jean-Philippe Gervais Effects of GlobalGAP on Horticultural Exports and Employment in Senegal Liesbeth Colen, Miet Maertens and Jo Swinnen |
| Keywords: | Non-tariff measures (NTMs); standards; agricultural tariffs; agricultural and agri-food trade; trade impact; welfare impact |
| JEL: | F13 F14 Q17 Q18 |
| Date: | 2012–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:34934&r=reg |
| By: | Harold Houba (VU University Amsterdam); Evgenia Motchenkova (VU University Amsterdam); Quan Wen (Vanderbilt University) |
| Abstract: | We study antitrust enforcement in which the fine must obey four legal principles: punishments should fit the crime, proportionality, bankruptcy considerations, and minimum fines. We integrate these legal principles into an infinitely-repeated oligopoly model. Bankruptcy considerations ensure abnormal cartel profits. We derive the optimal fine schedule that achieves maximal social welfare under these legal principles. This optimal fine schedule induces collusion on a lower price making it more attractive than on higher prices. Also, raising minimum fines reduces social welfare and should never be implemented. Our analysis and results relate to the marginal deterrence literature by Shavell (1992) and Wilde (1992). |
| Keywords: | Antitrust enforcement; Antitrust Law; Cartel; Oligopoly; Repeated game |
| JEL: | L4 K21 D43 C73 |
| Date: | 2011–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110166&r=reg |
| By: | Phil Wild (Department of Economics, University of Queensland); William Paul Bell (Department of Economics, University of Queensland); John Foster (Department of Economics, University of Queensland) |
| Abstract: | There has been significant debate about the potential role that supply side and demand side policy initiatives might exert upon key participants within the National Electricity Market (NEM) in attempts to curb growth in carbon emissions. From the perspective of supply side policy initiatives, most debate and analysis has been focused upon assessing the impact that a ‘Cap-&-Trade’ carbon trading scheme, and more recently, a carbon tax scheme, might have on changing marginal cost relativities in order to promote increased dispatch and investment in less carbon emissions intensive types of generation technologies including gas-fired generation and renewable generation technologies. However, with any forthcoming move towards a carbon constrained economy, there are many uncertainties over policy settings that are required to achieve the environmental goal of reduced greenhouse gas emissions and about the resulting impact on the National Electricity Industry more generally. A complete understanding of the impacts on the electricity industry of carbon abatement policies requires that new renewable technology proposals be incorporated in a model containing many of the salient features of the national wholesale electricity market. These features include intra-regional and inter-state trade, realistic transmission network pathways, competitive dispatch of all generation technologies with price determination based upon marginal cost and branch congestion characteristics. It is only under such circumstances that the link between carbon emission reductions and generator based fuel switching can be fully explored and the consequences for carbon emission reductions and changes in wholesale and retail electricity prices can be determined. |
| JEL: | Q40 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:4-2012&r=reg |
| By: | Thorvald Grung Moe |
| Abstract: | Henry Simons's 1936 article "Rules versus Authorities in Monetary Policy" is a classical reference in the literature on central bank independence and rule-based policy. A closer reading of the article reveals a more nuanced policy prescription, with significant emphasis on the need to control short-term borrowing; bank credit is seen as highly unstable, and price level controls, in Simons's view, are not be possible without limiting banks' ability to create money by extending loans. These elements of Simons's theory of money form the basis for Hyman P. Minsky's financial instability hypothesis. This should not come as a surprise, as Simons was Minsky's teacher at the University of Chicago in the late 1930s. I review the similarities between their theories of financial instability and the relevance of their work for the current discussion of macroprudential tools and the conduct of monetary policy. According to Minsky and Simons, control of finance is a prerequisite for successful monetary policy and economic stabilization. |
| Keywords: | Monetary Policy; Financial Stability; Narrow Banking; Financial Regulation |
| JEL: | B22 E42 E52 G28 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_713&r=reg |
| By: | Buda, Rodolphe |
| Abstract: | Trade under Contractual Development Area (FTCDA) to give up the dilemma Free-Trade vs Protectionist Policy which are second and third best (resp.). In such an area national economies would respect the current existing rules of the W.T.O. which would add the rule that each national economy would use a part (specified in advance) of the created wealth to develop infrastructures and social protection Some new investigations are obviously necessary to check whether such a configuration is optimal. |
| Keywords: | Economic and Social Development ; Free-Trade ; International Economics ; Protectionist Policy ; Regulation ; Social Protection ; W.T.O |
| JEL: | F42 F13 F02 F53 |
| Date: | 2012–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38047&r=reg |
| By: | Katrin Erdlenbruch; Mabel Tidball; Georges Zaccour |
| Abstract: | We consider a problem of groundwater management in which a group of farmers over- exploits a groundwater stock and causes excessive pollution. A Water Agency wishes to regulate the farmer's activity, in order to reach a minimum quantity and quality level but it is subject to a budget constraint and cannot credibly commit to time-dependent optimal policies. We construct a Stackelberg game to determine a set of constant policies that brings the groundwater resource back to the desired state. We define a set of conditions for which constant policies exist and compute the amount of these instruments in an example. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-09&r=reg |
| By: | Philippe Gagnepain (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Marc Ivaldi (TSE - Toulouse School of Economics - Toulouse School of Economics); Catherine Vibes (TSE - Toulouse School of Economics - Toulouse School of Economics) |
| Abstract: | This article is aimed at deepening our understanding of the functioning of competition in the local bus transportation industry and to evaluate its effectiveness. It provides an overview of the competitive constraints that are at work in the industry as discussed in the economic literature, and sketches empirical tests to check whether the intuitions provided by the economists are in line with the reality of the industry. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00684161&r=reg |
| By: | Gerhard Glomm (Indiana University); Juergen Jung (Towson University) |
| Abstract: | We construct a dynamic general equilibrium model to analyze the effects of large energy subsidies in a small open economy. The model pays special attention to domestic energy production and consumption, trade in energy at world market prices, as well as private and public sector production including the provision of public infrastructure. The model is calibrated to data from Egypt and then used to study policy reforms such as reductions in energy subsidies with corresponding reductions in consumption taxes, labor taxes, capital taxes, or increases in infrastructure investment. We calculate the new steady states, the transition paths to the new steady state and the size of the associated welfare losses or gains. In response to a 15 percent cut in energy subsidies, GDP may fall as less energy is used in production. Excess energy is exported and capital imports are reduced. Welfare in consumption equivalent terms can rise by up to 0.6 percent of GDP. Gains in output can be realized only if the government re-invests into infrastructure. |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2012-006&r=reg |