Reflections
on Economic Research and Public Policy
New Directions in Law and Economics
Rice, Salmon or Sushi? Political Competition for Supply or a Regulated Input
The
Shortage of Registered Nurses in Monopsony: A New View From Efficiency
Wage and Job-Hour Models.
A Simple Algebraic Approach to Teaching Oligopoly Modesl
The Mundell-Fleming Model Revisited
Quality, Uncertainty and the Internet: The Market For Cyber Lemons
Does
the Aggregate Demand Curve Suffer from the Fallacy of Composition?
Abatement
Expenditure Acts as an Environmental Investment: An Efficiency Wage Viewpoint
Economic Development: Survey of Course Outlines in North American Universities
Reflections on Economic Research and Public Policy
By Victor Fuchs
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New
Directions in Law and Economics
By Alan O. Sykes
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Rice,
Salmon or Sushi?
Political Competition for Supply or a Regulated Input
By Leo H. Kahane
This paper describes a simple theoretical model of competing interest
groups and users a modified Cournot model with endogenous policy. The
focus is on how different assumptions over internal lobby group organization
affect the outcome of lobby competition. The results of the paper formalize
some of the basic tenets and propositions contained in Olson's (1965)
The Logic of Collective Action and provides a more explicit, game-theoretic
structure for examining issues raised by Becker in his (1983) paper A
Theory of Competition Among Pressure Groups for Political Influence.
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The
Shortage of Registered Nurses in Monopsony: A New View From Efficiency
Wage and Job-Hour Models.
By Chung-cheng Lin
It has been argued that a monopsonist would like to hire more workers
at the equilibrium wage that he or she offers. The labor market equilibrium
in monopsony is therefore characterized by "reported vacancies."
This property is claimed to be perfectly consistent with the persistent
shortage of registered nurses. By using the famous Solow (1979) efficiency
wage monopsony model and a job-hour monopsony model, this paper examines
the validity of this argument. It is shown that a monopsonist may not
report vacancies since the labor market equilibrium in monopsony may be
in a state of excess labor supply. As a consequence, the theoretical explanation
of the shortage of registered nurses must be found beyond the simple textbook
monopsony. More…
A
Simple Algebraic Approach to Teaching Oligopoly Models
By Ananish Chaudhuri
This paper develops simple algebraic model which provides a new perspective
on (1) how we teach the interaction between firms in a Stackelberg model;
and (2) how the same framework can be extended to a discussion on entry
into an industry. Besides providing a different approach to teaching the
Stackelberg model, my framework has the additional advantage that it is
intuitive, technically simple and thus readily accessible to students
who may not have a background in calculus.
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The
Mundell-Fleming Model Revisited
By Liang-Shing Fan and Chuen-mei Fan
With the globalization of the world economy, improved international capital
mobility, and the popularity of fixed (pegged) exchange rates among small
developing and transition economies, the Mundell-Fleming model has reasserted
its importance as an analytical tool. This paper surveys the Mundell-Fleming
model in major macroeconomics and international economics textbooks.
In the graphical presentations, all textbooks use the traditional IS-LM
curves in the (y, i) plane except Mankiw who presents a model in the (y,e)
plane with a unique addition of the effect of the important restriction
policies.
It is generally known that fiscal expansions will worsen the trade balance.
A synthesized model is presented in which a necessary condition for such
effect is derived. More…
Quality,
Uncertainty and the Internet: The Market For Cyber Lemons
By John H. Huston and Roger W. Spenser
The internet makes it easier for buyers to purchase goods from distant
sellers. However, the inability of the buyer to examine the merchandise
results in asymmetry of information. This paper develops a theoretical
model to analyze the relationship between quality and price in a setting
of asymmetrical information. In the spirit of Akerlof (1970), the model
predicts that higher quality goods are less likely to be sold in the market.
Since buyers have difficulty distinguishing quality, sellers would have
to accept lower prices for their highest quality items. The model is tested
using data from internet coin auctions. The results show that coins that
are claimed to be of higher quality are less likely to sell and when they
do sell do so at lower prices relative to their market value. More…
Does
the Aggregate Demand Curve Suffer from the Fallacy of Composition?
By Ira Saltz, Pat Cantrell, and Joseph Horton
Colander (1995) identifies four main explanations of the universe relationship
between the price level and aggregate demand: the Pigou effect, the Keynes
effect, the international price level effect, and the intertemporal price
level effect. This paper examines whether any of these explanations can
be justified. All four are found to at least potentially suffer from some
form of the fallacy of composition. These problems are the result of the
fallacious use of microeconomic principles to draw conclusions about the
macroeconomy. The effect of price changes on aggregate demand appears
to be ambiguous or negligible.
.More…
Abatement
Expenditure Acts as an Environmental Investment: An Efficiency Wage Viewpoint
By Ching-chong Lai, Chih-yu Yang, and Ming-ruey Kao
By presenting an efficiency wage model embodying intertemporal optimization,
this paper proposes a channel to illustrate the willingness of firm's
abatement activities. The idea is that worker's efficiency on working
is positively related to his stock of health capital, and that abatement
will raise the flow of health. The firm thus will treat the abatement
expenditure as an environmental investment since it will raise the stock
of health capital, and hence the working efficiency in the future. In
addition, our model predicts that, when the authorities raise the subsidy
on firm's abatement expenditure, the firm will raise both employment and
abatement expenditures and lower its wage offer. .More…
Economic
Development: Survey of Course Outlines in North American Universities
By Tadiboyina Venkateswarlu
.More…