Microeconomic regulation
The implications of retail-sector liberalisation: Evidence from Romania
Retailing has experienced disruptive technology progress in recent decades – what might be called Walmartisation. This column explains how the entry of global retail chains may transform the retail sector and the supplying industries in the host economies. Focusing on the Romanian case, it shows that a 10% increase in the number of foreign chains’ outlets is associated with a 2.4% to 2.6% increase in the productivity in the supplying industries.
Estimating neutral interest rates in Latin America
The ‘neutral’ rate is the real interest that is consistent with stable inflation and narrow output gaps. This column discusses the various estimation techniques and presents estimates for a range of Latin American nations. No methodology is fully correct: central banks must still make a subjective judgement, but econometrics can significantly help to inform it.
Advertising and consumer prices
Advertising is expensive and thus raises the cost of goods, but it may encourage competition that keeps prices down. This column addresses the old question with data from a natural experiment brought about by tax harmonisation in Austria. It argues that on average advertising decreases consumer prices and estimates that if the 5% tax were abolished, consumer prices would decrease by about 0.25 percentage points.
A new way to understand consumer surplus
Consumer surplus in any market equals the area between the demand curve and the industry marginal-revenue curve. This column argues this observation has powerful implications for understanding rent seeking and price controls. For example, a price control reduces consumer surplus in an otherwise-competitive market with convex demand whenever supply is more elastic than demand.
Excessive risk-taking by banks: A new eReport
Risk-taking by banks played a critical role in the global crisis and Eurozone crisis. This column introduces a new eReport that focuses on four aspects of excessive risk-taking by banks, highlighting the causes and the cures. The eReport applies the best available theory and data, bringing together the main insights and views that have emerged from the crisis.
Other Recent Articles:
- Systemic risk regulation: Pigouvian taxes or quantity regulation?
- Entry regulation: Still costly
- US overinvestment in housing: Was the bankruptcy code to blame?
- Sensible finance for a dynamic economy
- The US financial reform bill: Hit or flop?
- Do inefficient stock markets drive bad corporate governance?
- Do public guarantees influence bank risk taking? Evidence from a natural experiment
- Dividend restrictions as macroprudential regulation
- Mobile regulation and the “waterbed effect”
- Risk, reward and responsibility: The financial sector and society
- How US personal bankruptcy reform exacerbated the US housing crisis
- The benefits of government outsourcing
- The economics of open-air markets
- Reducing media bias through regulation
- How best to pay executives?
- Enlisting moral hazard in the war on drugs
- Saving banks requires partial nationalisation
- Canadian auto subsidies: Money for nothing?
- How to help the auto sector: Looking beyond bailouts
- Board (in)competence and the subprime crisis
Most Read
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Rethinking macroeconomic policyBlanchard
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
