collusion collective action and protection theory and evidence this paper provides a novel explanation forthe formation of protectionist lobby groupsin imperfectly competitive sectors thelevel of collusion is shown to be a crucialdeterminant of the ability of firms tosustain lobbying we show that greatercollusion reduces firm contributionsto tariff lobbying when the governmentvalues welfare sufficiently and thecross price elasticity between the domesticand foreign goods is sufficiently high the empirical evidence from the u s supports the theory greater collusionreduces the level of pac contributions

determinants of bilateral trade protection in this paper determinants of bilateral protection levels are empirically identified when controlling for multilateral trade regulation and importing country specific factors strong empirical support is provided of that three bilateral factors are influencing the bilateral protection level specifically a country s protection level on goods from a trade partner is positively affected by the domestic import penetration of goods produced by the trade partner negatively influenced by the intra industry traded share of these imports and positively affected by the trade partner s protection level on domestic goods moreover very high explanatory values are provided in the cross section estimations indicating that these determinants policy regulations and importer specific factors jointly explain almost all of the variation in bilateral protection levels the results are general in the sense that estimations are performed for a large sample of bilateral trade relations including 22 trade partners that are highly differentiated in terms of country characteristics the overall results indicate that to the extent that policy makers can affect bilateral protection levels under multilateral trade regulation they act on political economy rather than economic goals

conflict cooperation and commerce the effect of international political interactions on bilateral trade flows the public choice approach to political economy is employed to gain insight into the connection between international politics and trade flows a model is constructed in which importers are assumed to be rational utility maximizers who seek to satisfy international security as well as economic welfare objectives this model of bilateral trade flows reflects contemporary theory in the field of international economics and it explicitly incorporates the general foreign policy orientation of importers among its determinants the model is tested in 16 annual crosssectional estimations 1960 75 for a complete network of 25 countries the findings show considerable support for the hypothesis that trade flows are significantly influenced by broad political relations of amity and enmity between nations the author concludes that nations adjust trade ties to satisfy security as well as economic welfare goals and that a formal political economy of trade should reflect this fact

decomposing household professional and market forecasts on inflation a dynamic factor model analysis a dynamic factor model with stochastic volatility is used to investigate the relationships between three alternative measures of inflation expectations the results show evidence of both a common time varying trend and a common transitory component between inflation and short term inflation expectations from households professionals and markets while the common time varying trend has declined in both level and volatility since the early 1980s it was found that consumer expectations are disproportionately influenced by the visibility of prices of select few goods roughly speaking a 1 point increase in food and energy prices leads to about 1 3 point increase in consumer forecasts of inflation in terms of policymaking this finding suggests that stability in highly visible prices can moderate inflation in a meaningful way

statistical properties of the roll serial covariance bid ask spread estimator exact small sample population moments of the standard serial covariance and variance estimators are derived under the assumptions of the roll bid ask spread model noise explains why serial covariance estimates are often positive in annual samples of daily and weekly returns small sample estimator bias partially explains why weekly estimates are more negative than daily estimates noise causes the roll spread estimator to be severely biased by jensen s inequality the french roll adjusted variance estimator is unbiased but noisy empirical tests confirm the major implications

trading mechanisms and stock returns an empirical investigation this paper examines the effects of the mechanism by which securities are traded on their price behavior we compare the behavior of open to open and close to close returns on nyse stocks given the differences in execution methods applied in the opening and closing transactions opening returns are found to exhibit greater dispersion greater deviations from normality and a more negative and significant autocorrelation pattern than closing returns we study the effects of the bid ask spread and the price adjustment process on the estimated return variances and covariances and discuss the associated biases we conclude that the trading mechanism has a significant effect on stock price behavior

the political economy of declining industries senescent industry collapse revisited many observers have noted a strong tendency for protection once it is instituted to persist over time this paper first shows that persistent protection arises whenever lobbying is an alternative to costly adjustment with endogenous protection the level of tariffs is an increasing function of past tariffs the more an industry lobbies the greater the current protection it receives and the less it adjusts and the less the industry adjusts the more effective it is as a lobby in the future when the costs of lobbying and adjustment are fully variable declining industries contract more slowly over time and never fully adjust however the paper shows that adding a fixed cost of lobby formation or maintenance is sufficient to generate an endogenous collapse of protection such as that predicted by cassing and hillman 1986 american economic review 76 516 523 in which an industry abruptly terminates its lobbying and loses its protection finally the paper examines the well documented bias against growing industries in the lobbying process

high frequency lead lag effects and cross asset linkages a multi asset lagged adjustment model motivated by the empirical evidence of high frequency lead lag effects and cross asset linkages we introduce a multi asset price formation model which generalizes standard univariate microstructur

is environmental policy a secondary trade barrier an empirical analysis should international trade agreements be extended to include negotiations over environmental policy the answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries our results suggest that they do previous studies of this relationship have treated the level of environmental regulation as exogenous and found a negligible correlation between environmental regulation and trade flows in contrast we find that when the level of environmental regulation is modelled as an endogenous variable its estimated effect on trade flows is significantly higher than previously reported jel classification fl f14 f18 est ce que la politique environnementale est une barriere commerciale secondaire une analyse empirique est ce que les accords commerciaux internationaux doivent etre etendus pour couvrir la politique environnementale la reponse depend du degre de distorsion que les pays introduisent dans leur politique environnementale pour proteger leurs industries nationales nos resultats suggerent que cet impact est important des etudes anterieures de cette relation ont traite la politique environnementale comme exogene et ont montre qu il existe une co relation negligeable entre politique envir onnementale et flux commerciaux au contraire nous revelons que quand la politique environnementale est consideree comme variable endoge ne son effet sur les flux com merciaux est plus eleve de maniere significative que ce qu on a note anterieurement

exchange rates and industry demands for trade protection the recent confrontation between china and the united states over currency policy illustrates a broader phenomenon exchange rate misalignments tend to spill over into trade policy although previous studies have shown that aggregate protectionist activity is positively related to the level of the real effective exchange rate we explore this relationship at the industry level several industry specific characteristics determine the protectionist response to exchange rate changes including the degree of exchange rate pass through the level of import penetration and the share of imported intermediate inputs in total industry inputs we find that the marginal effect of currency appreciation on the number of industry level antidumping petitions is positive and significant only for industries with high pass through therefore exchange rates appear to induce demands for trade barriers only in industries where competitiveness is directly harmed by currency appreciation

effective use of survey information in estimating the evolution of expected inflation the evolution of the term structure of expected u s inflation is modeled using survey data to provide timely information on structural change not contained in lagged inflation data to capture shifts in subjective perceptions the model is adaptive to long horizon survey expectations however even short horizon survey expectations inform shifting endpoint estimates that capture the lag between inflation and the perceived inflation target which anchors inflation expectations results show movements of the perceived target are an important source of inflation persistence and suggest historical u s monetary policy was not fully credible for much of the postwar sample

on the incidence of us tariffs this paper provides evidence on the incidence of tariffs on products of export interest to developing countries by investigating the relationship between per capita incomes of us trading partners and tariff rates it constitutes the first attempt to assess the incidence of tariffs imposed by the us on countries that span the entire range of per capita incomes average tariff rates are lower for the poorest and richest countries and higher for countries in the middle of the income distribution this finding is not consistent with the widely held view that tariffs used by industrial nations bear more heavily on products of export interest to poorer developing countries than on imports from industrial nations it is consistent with the tariff escalation pattern reported in earlier studies if advanced countries account for most products at the high end of the fabrication scale results show that poorest countries will find it difficult to escape tariffs by attaining higher levels of economic development

how do firms form their expectations new survey evidence author s coibion o gorodnichenko y kumar s abstract 2018 american economic association all rights reserved we survey new zealand firms and document novel facts about their macroeconomic beliefs there is widespread dispersion in beliefs about past and future macroeconomic conditions especially inflation this dispersion in beliefs is consistent with firms incentives to collect and process information using experimental methods we find that firms update their beliefs in a bayesian manner when presented with new information about the economy and that changes in their beliefs affect their decisions inflation is not generally perceived as being important to business decisions so firms devote few resources to collecting and processing information about inflation

firms and tariff regime change explaining the demand for protection although it is commonly argued that there is a connection between tariff levels and business conditions this hypothesis has not been subjected to systematic empirical analysis or given any theoretical basis the author presents two complementary theories of the movement of tariff levels in response to changing business conditions both explain tariff changes in terms of the changing political demands of business firms and both rely on the business cycle to drive these changing demands one theory is a conventional argument about changing opportunities for entry and exit the other treats firms as satisficers the theories yield similar predictions preliminary empirical analysis while consistent with both does not differentiate between them

incremental protection and efficient political choice between tariffs and quotas this paper offers a new political economy explanation for the increasing use in recent years of quotas instead of or in combination with tariffs as a form of trade protection we show that under domestic monopoly the comparative efficiency of tariffs and quotas in achieving political objectives will vary depending on the nature of the mark et and the level of protection at high levels of protection quotas can become more politically efficient than tariffs we also show that at low levels of protection a price equivalent quota may not exist

wages and employment in a segmented labor market this paper analyzes the impact of business cycle fluctuations on a labor market segmented into a unionized primary sector and a competitive secondary sector either permanent or temporary changes in real aggregate demand are shown to widen the intersectoral wage differential in recession and under reasonable specifications of key parameters to cause greater fluctuations of primary sector employment than secondary sector employment this pattern agrees with the stylized facts of the u s economy

intradaily price volume adjustments of nyse stocks to unexpected earnings the speed and path of adjustment in stocks to the degree of earnings surprise in their quarterly announcements are studied using price volume transactions data a differential price adjustment process was observed with stocks having large positive earnings surprises experiencing a faster adjustment compared with those stocks with negative earnings surprises volume transaction frequency and size were found to be directly related to the absolute degree of surprise but very favorable earnings surprise stocks experienced initially a large number of smaller trades while stocks with large unfavorable earnings surprises had relatively fewer transactions but higher volume per trade the stock market s microstructure has received increasing attention from researchers especially from an empirical perspective as transaction data on prices and volume have become more readily available 1 an important subset of this research has been the study of stock price adjustments to significant news events specifically publicly announced information with economic content should be quickly reflected in prices in an unbiased manner this paper contains a study of the intradaily adjustment in stocks to the informational content of earnings reports using price changes trading volume and transaction frequency and size we examine the transaction to transaction and time series stock behavior associated with different degrees of earnings surprise embedded in earnings announcements the degree of surprise is measured by a comparison of actual with forecasted earnings for 325 new york stock exchange nyse firms these firms are subdivided into five earnings surprise categories in order to determine whether the speed and path of their price volume adjustment processes are different one question of interest is whether the adjustment process for favorable versus unfavorable earnings surprises is similar or different another is whether any adjustment is distinguished by a few large trades or a large number of smaller

the political economy of the tariff cycle how can protectionism and free trade succeed one another our answer focuses on the changing balance of private actors political demands these actors acquire interests in tariff policies because their assets are spatially concentrated and trade in these assets is subject to various limitations actors in regions experiencing no new investment in an established industry old regions have interests that sometimes differ from those in regions where there is new investment we show that old regions have no reason to be involved in tariff politics at business cycle peaks during troughs whether a state becomes more or less protectionist depends ceteris paribus on the relative political strength of old import competing and old exporting interests if old import competing industries outweigh the old exporters then protection will tend to increase at the trough and decrease at the peak of a business cycle the opposite result occurs when old exporters are more influential

can developing country exports keep growing in the 1980s this paper reports on the initial findings of the program of studies on the impact of developing country exports of manufactures on the market of the principal industrial countries a discussion of the liberal protectionist balance leads to the conclusion that while quantitative assessments have been made of the decrease of protection through tariff reductions in the 1970 s it has not been possible to measure the increases in protection resulting from various other measures it seems that the resurgence of non tariff protectionism in the 1970s has not destroyed the liberal gains of earlier decades analysis of market penetration suggests the industrial countries market for ldc manufactures is large and still growing it appears that the liberal protectionist balance in the 1980s will be critical particularly for lower income and less successful developing countries policies to make liberal attitudes to trade dominant are suggested

measuring cash futures temporal effects in the uk using partial adjustment factors abstract the nature and extent of intertemporal adjustments across stock index futures and cash markets in the uk are investigated in terms of partial adjustment factors this approach affords the means of establishing both differential price movements in these markets and additionally providing a readily interpretable measure of the degree of such relative price movements analytic expressions are developed for jointly measuring the partial adjustment factors in cash and futures markets using a partial adjustment with noise model the measures are adjusted for non synchronous trading and asymptotic sampling variances derived adjustment factors are estimated using daily data over the period 1984 1992 with differencing intervals ranging from one to thirty days price adjustments were found to be fuller in futures markets particularly over shorter differencing intervals corrections for non synchronous effects in the cash market increased the magnitude of price adjustment as did the exclusion of data from the 1987 crash period

earnings announcements stock price adjustment and the existence of option markets this paper employs a new approach to study the effects of option trading on the behavior of underlying stock prices extant research compares distributional properties of the stock price at two points in time divided by an event in the option market that might affect price behavior as an alternative we examine the stock price adjustment to the release of quarterly earnings using samples of firms with and without listed options we find the two samples exhibit different adjustment processes with the nonoption firms requiring substantially more time to adjust since the advent of organized stock option trading the investment community

unemployment collective bargaining and the demand for protection there is a widespread consensus among nonacademic observers that labor unions with large numbers of unemployed members have been central actors in political coalitions demanding protectionist trade policies since the mid 1970s in advanced industrial societies yet trade unions and unemployment are hardly mentioned in most theories of the politics of international trade the purpose of this paper is to develop a theoretical framework for understanding the importance of unemployment as a determinant of protectionist demands that is consistent with optimizing behavior on the part of union members and firms models of labor negotiations derived from cooperative bargaining theory are used to illustrate why the material benefits of protection received by union members and their employers in protected industries increase when union members are unemployed even when workers are risk neutral and capital is immobile

union organization in advanced industrial democracies i suggest a new explanation of cross national differences in unionization rates the size of the labor force size matters because the gains unions are able to achieve in collective bargaining depend on the proportion of substitutable workers who are organized while the costs of organizing depend in part on the absolute number to be recruited the comparison of the costs and benefits of organizing new workers yields the conclusion that unions in larger labor markets will accept lower levels of unionization statistical analysis of cross national differences in unionization rates among advanced industrial societies in the late 1970s indicates that the size of the labor force and the cumulative participation of leftist parties in government explain most of the variance

a simple measure of price adjustment coefficients one measure of market efficiency is the speed with which prices adjust to new information we develop a simple approach to estimating these price adjustment coefficients by using the information in return processes this approach is used to estimate the price adjustment coefficients for firms listed on the nyse and the amex as well as for over the counter stocks we find evidence of a lagged adjustment to new information in shorter return intervals for firms in all market value classes and some support for the proposition that prices adjust much more slowly and with more noise for smaller firms

assessing inflation expectations anchoring for heterogeneous agents analysts businesses and trade unions forecasts of agents who are actively involved in the setting of prices and wages are less readily available than those of professional analysts but may be more relevant for understanding inflation

toward a business cycle model of tariffs a modified interest group model links movements in tariffs to changes in the level of economic activity within nations this model is introduced and tested for tariff behavior in the 19th and early 20th centuries in three nations the united states great britain and germany empirical analysis lends strong support to the model s central thesis that tariffs are sensitive to movements within a business cycle tariff changes occurring in the three nations with the exception of british tariff increases generally conform to the expectations of the model furthermore business cycle sensitivity provides an explanation of the behavior of tariffs superior to two prominent alternatives those based on ideology and on hegemonic stability

heterogeneous inflation expectations and learning using the panel component of the michigan survey of consumers we estimate a learning model of inflation expectations allowing for heterogeneous use of private information and lifetime inflation experience life experience inflation has a significant impact on individual expectations but only for 1 year ahead inflation public information is substantially more relevant for longer horizon expectations even controlling for life experience inflation and public information idiosyncratic information explains a nontrivial proportion of the inflation forecasts of agents women ethnic minorities and less educated agents have a higher degree of heterogeneity in their idiosyncratic information and give less importance to recent movements in inflation

short sales and speed of price adjustment evidence from the hong kong stock market abstract we present empirical evidence that short sales contribute to market efficiency by increasing the speed of price adjustment to not only private public firm specific information but also market wide information shortable stocks are characterized by weaker trade continuity and stronger quote reversals they adjust faster to new information than non shortable counterparts these findings remain robust even in an up market condition in which short sales are not binding the amount of information incorporated in each trade is also significantly higher for shortable than non shortable stocks in both up and down market conditions after controlling for firm size trading volume liquidity price and option trading short sales stand out as one of the significant factors that speed up the price adjustment

the kennedy round evidence on the regulation of international trade in the united states the purpose of this paper is to analyze and provide empirical evidence regarding the regulation of international trade flows our goal is to provide an explanation of the changes in the interindustry pattern of trade restrictions which emerged from the kennedy round of tariff negotiations the principal conclusion of the analysis is that the pattern of protection which resulted from the kennedy round was shaped to minimize the domestic political disruption resulting from liberalization industries which faced significant import threats and whose characteristics enhanced their potential political influence were able to maintain tariff protection in the face of overall liberalization the potential impact of the agreed upon tariff reductions was partially undermined by the introduction of offsetting nontariff trade barriers ntbs in addition ntbs were introduced systematically in industries that were becom

jobs jobs jobs a new perspective on protectionism this paper analyzes the determinants of protectionism in a small open economy with search frictions in this environment jobs generate rents whose access depends on the level of trade protection by raising the domestic price of a good a government may attract more firms in a particular industry this raises the probability that workers will find jobs in this sector and in turn will benefit from the associated rents though simple this channel may help explainavarietyofstylizedfactsonthestructureoftradeprotectionandindividualtrade policy preferences jel f130 f160

macroeconomic expectations of households and professional forecasters economists have long emphasized the importance of expectations in determining macroeconomic outcomes yet there has been almost no recent effort to model actual empirical expectations data instead m acroeconomists usually simply assume that expectations are rational this paper shows that while empirical household expectations are not rational in the usual sense expectational dynamics are well captured by a model in which households views derive from news reports of the views of professional forecasters which in turn may be rational the model s estimates imply that people only occasionally pay attention to news reports this inattention generates stickyness in aggregate expectations with important macroeconomic consequences

environmental regulations transfers and trade theory and evidence abstract this paper develops a theory of compensation of producers for the costs associated with environmental regulations we show that the existence of transfers can give counter intuitive effects of environmental policy on both output and trade flows in particular the compensation obtained by producers neutralizes the effect of environmental policy on output and consequently on trade flows this may help explain why previous empirical research has found weak evidence that environmental regulations affect trade patterns the theory is tested using agricultural sector data the evidence supports the hypothesis that environmental regulations and transfers are positively correlated

sources of disagreement in inflation forecasts an international empirical investigation abstract central to the conduct of monetary policy are inflation forecasts inflation forecasts are not unique central banks and professional organizations generate inflation forecasts while households are surveyed about their inflation outlook this paper estimates inflation forecast disagreement for nine economies over the 1999 2009 period five of which target inflation i find that central bank transparency tends to increase forecast disagreement to the extent this reflects the attention paid to inflation performance the implication is that transparency is beneficial moreover this finding does not appear to be a feature that applies only to central banks that must adhere to an inflation target

whose expectations augment the phillips curve abstract this letter uses consumer survey data to estimate expectations augmented phillips curves with inflation expectations disaggregated by socioeconomic and demographic groups the inflation expectations of high income college educated male and working age people play a larger role in inflation dynamics than do the expectations of other groups of consumers or of professional forecasters

industry rent seeking and the filing of unfair trade complaints abstract this paper adopts a rent seeking framework to explain the incidence of antidumping and countervailing duty complaints brought to the u s international trade commission and the department of commerce tobit analysis on all 3 digit sic industries is employed to examine the relationship between the frequency of unfair trade complaints and such factors as industry concentration unionization capital intensity and levels and or changes in employment price cost margins and import penetration large capital intensive industries particularly those facing employment losses and rising import shares are found to be most likely to file complaints protection of quasi rents accruing to capital and labor rather than protection of monopoly returns appears to be the primary impetus behind the filing of unfair trade complaints

obstacles to disinflation what is the role of fiscal expectations persistently high expected inflation often makes it difficult for policy makers to recover from inflationary episodes without substantial output losses using survey data from eleven disinflation episodes we can assess whether the more or less sluggish decline of inflation rates towards lower target levels is related to backward looking pricing behavior or to imperfect credibility of the stabilization efforts we find that expectations of future inflation play a much more important role than past inflation in shaping the inflation process second we find that an improvement in various measures of fiscal balances significantly reduces inflation expectations this evidence suggests that when attempting to stabilize inflation priority should be given to building fiscal credibility oya celasun r gaston gelos and alessandro prati

the political economy of the european customs classification customs classification is an important element in a country s trade policy how a good is classified can affect the rate of duty that applies the coverage of non tariff barriers and the formulation and application of rules of origin reclassifications can occur because of the introduction of a new product but also because of protectionist motives this paper is the first attempt at explaining these reclassifications focusing on the european union i examine whether the number of tariff lines in an industry result from the introduction of new products or from protectionist lobbying the analysis focuses on 90 manufacturing industries over 12 years results suggest that protectionist lobbying does play a role in explaining changes in the eu s customs classification

implicit contracts a survey 7mplicit contracts resolve the distribution of uncertainty and utilization of specific human capital between risk averse workers and less risk averse firms incomplete contracts are required to yield involuntary layoffs in contract markets otherwise contracts are efficient and pareto optimal by construction there is a close relation between contract theory and neoclassical labor market theory contracts smooth consumption but increase the volatility of labor supply and labor utilization to demand disturbances because contractural insurance eliminates the income effects of socially diversifiable risks this result is similar to the intertemporal substitution hypothesis however the price mechanism in a contract is substantially different contracts embody a nonlinear two part pricing scheme the lump sum part allocates the income consumption consequences of risks and the marginal pricing part allocates production and labor utilization this implicit pricing mechanism is in all respects flexible though the observed average hourly wage combines both parts and may give the outward appearanceof rigidity furthermore the observed average wage rate in a contract does not reflect marginal conditions necessary for structural econometric estimation indivisibilities appear necessary to account for the split between work sharing and layoffs contracts with private information are also considered in the nonlinear pricing context this abstract was borrowed from another version of this item

the determinants of exit in an open economy in this paper the determinants of exit are investigated for the manufacturing sector of the united states economy which has been subjected to growing international influences the analysis uses united states cross sectional data the results of the exit equation suggest that low profitability declining industry growth and displacement of incumbents by entrants foster exit international influences are also seen to have an impact on u s manufacturing exit specifically imports into an industry have a small effect on exit and protection has little influence in stemming exit

taxation and the political economy of the tariff traditional accounts of u s tariff policy emphasize trade strategies and interest group politics this article makes a departure it opens with an observation up until world war i the tariff was the largest single source of federal government revenues it then explores the significance of tariffs as taxes theoretically and empirically in its first part the article develops a theory of taxation politics and applies it to the tariff in its second part it submits the theory to an empirical test modeling changes in u s tariff rates from 1829 to 1940 the politics of tariff revision it argues followed from two characteristics of the tariff as tax from the extent of the treasury s dependence upon it and from the distributive pattern of its burdens and benefits taken together the article concludes revenue dependence and distributive incidence account for several diverse aspects of american tariff policy including the structure of its coalitions the shifts in its objectives and the timing of its innovations

redistributive cooperation market failure wealth transfers and the basle accord indecember1987 policymakersbelongingtothegroupoften g 10 signeda far reaching agreement on international nancial regulation the basle accord ontheinternational convergence of capital measuresand capital standards underthetermsof thisagreement g 10 policymakersimplemented uniform risk based capitalrequirements on commercial banks the origins of the basle accord according tokapstein lay in the consequencesof international nancial integration international nancial integration by raising systemic risk and eroding regulators capacity toensure the soundness of national banking systems generated a market failure evi denced by thedebt crisis commercial bankshad accepted ariskier portfolioofloansthan society considered optimal and were now unwilling to bear the full costs of thislending behavior financial market failurecreated a demand for international regula tiontowhichpolicymakersrespondedby supplying thebasleaccord to theextentthat the payments system had the characterof apublic good it wasreasonable to askevery state to contribute to its maintenance bank supervisors responded to theneed for greater oversight by negotiating the basleaccord

breaking with orthodoxy the politics of economic policy responses to the depression of the 1930s under the same systemic shock the collapse of the international economy in 1929 different countries formulated different policy responses britain germany the united states france and sweden all began by attempting the orthodoxy of deflation soon after they abandoned deflation devalued their currencies erected tariff barriers and set up corporatistic production and marketing arrangements a few countries went further and began experimenting with demand stimulus fiscal policy the most successful was nazi germany the swedish and u s efforts were much more limited and less effective the french attempt crumbled in less than a year and britain never tried demand stimulus why this divergence in policy the politics of policy response the societal basis of different policy coalitions and the way in which they were expressed through different political formulations suggests an answer in all countries labor agriculture and certain elements of business became available for revolts against policy orthodoxy what differed across countries was the specific balance of forces among these interest groups and the political factors that shaped their combinations the effect of political leadership institutions and other variables on outcomes depended critically on the way specific social forces in each society used and worked through them

lobbying and adjustment in declining industries abstract this paper explains the persistence of protection in terms of interaction between industry adjustment lobbying and the political response faced with a trade shock owners of industry specific factors can respond in two ways they can undertake costly adjustment or they can lobby politicians for trade protection and thereby mitigate the need for adjustment the choice will depend on the relative returns from adjusting relative to lobbying by introducing an explicit lobbying process it can be shown that the current level of protection is an increasing function of past protection and that declining industries contract more slowly over time the more responsive are politicians to lobbying in addition the model makes clear that the type of senescent industry collapse predicted by cassing and hillman 1986 is only possible under fairly special assumptions about the technology of lobbying

public policies pressure groups and dead weight costs abstract this paper presents a model of competition among special interest groups for political influence each active group exerts pressure to affect its taxes and subsidies where activities of different groups are related by the equality between total tax collections and total tax subsidies the dead weight costs and benefits of taxes and subsidies play a major role in our model an increase in the dead weight cost of taxation encourages pressure by taxpayers while an increase in the dead weight costs of subsidies discourages pressure by recipients various applications of the analysis are discussed