Found 597 article(s) in category 'Regulation'

The Efficiency Consequences of Heterogeneous Behavioral Responses to Energy Fiscal Policies

The Efficiency Consequences of Heterogeneous Behavioral Responses to Energy Fiscal Policies. Joseph Aldy, December 2017, Paper, “The behavioral responses to taxes and subsidies are often subject to various behavioral biases and transaction costs—what we define as “microfrictions.” We develop a theoretical framework to show how these microfrictions—and their heterogeneity across the population and policy instruments—affect the design of Pigouvian policies. Standard Pigouvian pricing still holds with transaction costs, but requires adjustment with behavioral biases. We use transaction-level data from the US appliance market to estimate the heterogeneous behavioral responses to an array of energy fiscal policies and to quantify microfrictions. We then assess optimal fiscal policies and find that it is rarely optimal to couple a Pigouvian tax on energy with an investment subsidy in this context. We also find that energy labels—intended to increase the salience of energy information—can interact in perverse ways with both taxes and subsidies.Link

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US Fed chair’s biggest problem will be staying out of Trump’s shadow

US Fed chair’s biggest problem will be staying out of Trump’s shadow. Kenneth Rogoff, November 3, 2017, Opinion, “With the appointment of Jerome Powell as the next chair of the United States Federal Reserve, Donald Trump has made perhaps the most important single decision of his presidency. It is a sane and sober choice that heralds short-term continuity in Fed interest rate policy, and perhaps a simpler and cleaner approach to regulatory policy.Link

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Can Audits Backfire? Evidence from Public Procurement in Chile

Can Audits Backfire? Evidence from Public Procurement in Chile. Dina Pomeranz, October 2017, Paper, “Audits are generally intended to monitor compliance with existing rules. However, audits can also create unintended impacts and incentives through the specific protocol by which they are executed. In particular, audits can discourage the use of complex administrative procedures with more rules for auditors to check. This paper investigates the effects of procurement audits on public entities’ choice of purchase procedures in Chile. While the national procurement legislation tries to promote the use of more transparent and competitive auctions rather than discretionary direct contracts for selection of suppliers, auctions are significantly more complex and the audit protocol mechanically leads to more scrutiny and a higher probability of further investigation for auctions than for direct contracts.Link

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The Political Economy of Carbon Pricing Policy Design

The Political Economy of Carbon Pricing Policy Design. Joseph Aldy, October 2017, Paper, “The goal of the Harvard Project on Climate Agreements, which was established in 2007, is to identify and advance scientifically sound, economically sensible, and politically pragmatic public policy options for addressing global climate change. Drawing upon leading thinkers from around the world, the Project conducts research on policy architecture, key design elements, and institutional dimensions of international and domestic climate-change policy. The Project is directed by Robert N. Stavins, A. J. Meyer Professor of Energy and Economic Development, Harvard Kennedy School. For more information, see the Project’s website…Link

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Don’t Bank on Bankruptcy for Banks

Don’t Bank on Bankruptcy for Banks. Mark Roe, October 18, 2017, Opinion, “As a part of their efforts to roll back the 2010 Dodd-Frank Act, congressional Republicans have approved a measure that would have courts, rather than regulators, oversee megabank bankruptcies. It is now up to the Trump administration to decide if it wants to set the stage for a repeat of the Lehman Brothers collapse in 2008.Link

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China’s Export Restrictions and the Limits of WTO Law

China’s Export Restrictions and the Limits of WTO Law. Mark Wu, October 2017, Paper, “In recent years, China has enacted export restrictions on a range of minerals and other raw materials. They include export quotas, export duties, export licenses, and other administrative actions. Although such export restrictions have already been found to be inconsistent with China’s WTO obligations, the practice persists. This article advances an explanation for why this is the case. It argues that the problem lies with the lack of retrospective remedies in WTO dispute settlement. Consequently, China is able to breach its WTO obligations temporarily with minimal consequence. Although such restrictions may have negative consequences for upstream extraction firms, China is able to implement the restrictions because several upstream firms are state-owned enterprises.” Link

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Rethinking Macroeconomic Policy: International Economy Issues

Rethinking Macroeconomic Policy: International Economy Issues. Gita Gopinath, October 10, 2017, Paper, “In this paper I make the following ten remarks on the topics of exchange rate policy, capital flow management, protectionism, and global cooperation: 1) The gains to exchange rate flexibility are worse than you think; 2) The ‘Trilemma’ lives on; 3) The U.S. dollar exchange rate drives global trade prices and volumes; 4) Gross capital flows matter as much as net flows, and global banks have internationalized U.S. monetary policy. 5) Emerging markets tilt away from foreign currency to local currency debt reduces their exposure to global risk factors; 6) Low interest rate environments can lead to misallocation of resources and lower productivity; 7) The relationship between global imbalances, reserve accumulation, and currency manipulation is not well identified. 8) Uniform border taxes are not neutral; 9) Trade is not the main driver of earnings inequality, but at the same time policy has failed to address its redistributive consequences. 10) Global coordination of financial regulation is essential alongside country level macroprudential polices. Reserve accumulation and currency swap lines do not substitute for the lender of last resort role of the IMF.” Link

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The SEC Plans to Collect Too Much Information

The SEC Plans to Collect Too Much Information. Hal Scott, October 2, 2017, Opinion, “Is your personal information safe from the Securities and Exchange Commission? The SEC has mandated that U.S. stock exchanges and the Financial Industry Regulatory Authority establish a database by November 2018 that will store the names, birth dates, Social Security numbers and brokerage accounts of tens of millions of U.S. investors as part of the Consolidated Audit Trail.Link

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