aid dispersion measurement in principle and practice summary excessive dispersion of development assistance has been high on the paris agenda on aid effectiveness however there is no agreement in the existing literature on how aid dispersion should be measured and few studies of the extent of the problem we argue for using the theil index for both recipients and donors this relative inequality measure has a major advantage it allows for a perfect decomposition into variation between and within entities exploiting this property we can rank official donors and recipients not only in terms of the total spread but also assess the contributions of geographic and sectoral dispersion we provide a detailed picture of developments along various dimensions globally as well as for countries income groups and regions over 1998 13 we further distinguish between bilateral and multilateral donors consistent with other studies using more limited samples we find little effect of the paris agenda overall aid is more fragmented in sub saharan africa and in the poorest countries globally as well as for most donor and recipient countries between variation is the main driver of the spread lending support to the geographic concentration policies many donor countries have adopted bilateral aid has been somewhat more dispersed than multilateral aid and in both cases the large number of donors controlling similar shares of total funds is a major driver of the total spread the latter suggests that concentration could also be achieved through a reduction of the number of actors on the donor side of the aid industry a perspective that previous studies using other measures have been unable to capture

grading minimum quality standards and the labeling of genetically modified products we relate the labeling of genetically modified gm products to the theory of grading and minimum quality standards the model represents three stages in the supply chain assumes a vertical product differentiation framework allows for the accidental commingling of non gm products and treats regulation as a purity threshold for non gm products we find that a non gm purity level that is too strict leads to the disappearance of the non gm product and that some quality standard benefits farmers indeed the standard that is optimal from the perspective of producers is stricter than what is optimal for consumers and for societal welfare

consumption effects of genetic modification what if consumers are right this paper develops a model of differentiated consumers to examine the consumption effects of genetic modification gm under alternative labelling regimes and segregation enforcement scenarios analytical results show that if consumers perceive gm products as being different than their traditional counterparts gm affects consumer welfare and thus consumption decisions when the existence of market imperfections in one or more stages of the supply chain prevents the transmission of cost savings associated with the new technology to consumers gm results in welfare losses for consumers the analysis shows that the relative welfare ranking of the no labelling and mandatory labelling regimes depends on i the level of consumer aversion to gm products ii the size of marketing and segregation costs under mandatory labelling iii the share of the gm product in total production and iv the extent to which gm products are incorrectly labelled as non gm products

inserting gm products into the food chain the market and welfare effects of different labeling and regulatory regimes the purpose of this article is to examine the system wide effects of the introduction of genetically modified gm products with and without labeling and to compare these two regimes to a third regime where gm products are not present either because they have not yet been developed or because they have been banned for each regime the decisions and welfare of consumers producers and life science companies are examined the article explicitly incorporates the consumer response to the introduction of gm technology and considers different market structures of the life science sector

when is foreign aid policy credible aid dependence and conditionality the author studies foreign aid policy within a principal agent framework he shows that one reason for foreign aid s poor overall record may be a moral hazard problem that shapes the aid recipient s incentive to undertake structural reform the model s basic prediction is a two way relationship disbursements of foreign aid are guided in part by the needs of the poor anticipating this recipients have little incentive to improve the welfare of the poor preliminary econometric work shows that the data support this hypothesis in principle conditionality could partly solve this problem but only if the donor can make a binding commitment to increase disbursements in good relative to bad states without such a commitment technology aid disbursements remain guided by the needs of the poor and recipient countries maintain a low effort to reduce poverty contrary to the conventional wisdom found in the aid literature the author shows that the welfare of all parties might be improved by using tied project aid or by delegating part of the aid budget to an international agency with less aversion to poverty

on mqs regulation innovation and market coverage abstract we revisit maxwell s 1998 analysis to show that his results are incompatible with the assumption of full market coverage as a consequence the effects of mqs regulation on the high quality firm s incentive to adopt a more efficient technology cannot be assessed in this model

the induced innovation hypothesis and energy saving technological change we develop a methodology for testing hicks s induced innovation hypothesis by estimating a product characteristics model of energy using consumer durables augmenting the hypothesis to allow for the ine uence of government regulations for the products we explored the evidence suggests that i the rate of overall innovation was independent of energy prices and regulations ii the direction of innovation was responsive to energy price changes for some products but not for others iii energy price changes induced changes in the subset of technically feasible models that were offered for sale iv this responsiveness increased substantially during the period after energy efficiency product labeling was required and v nonetheless a sizable portion of efficiency improvements were autonomous

minimum quality standards with more than two firms abstract this paper studies the effects of introducing a minimum quality standard mqs in a vertically differentiated market it is shown that previous results indicating beneficial effects of a mqs heavily depend on the duopolistic set up they had been developed in an example with three firms is then provided showing that not all reaction functions in quality levels are increasing we also show that the introduction of the standard decreases the profit levels of all firms the maximum quality level and the average quality consumed as a consequence despite the increase in consumer surplus any effective mqs would reduce welfare

the welfare implications of minimum quality standards previous analysis of the social welfare implications of minimum quality standards has yielded no decisive results in this paper the specific nature of consumer and producer responses to quality standards is incorporated into the analysis both consumer and producer gains are shown to be impossible when consumers can perceive quality before purchase even if low quality produce is diverted to secondary markets standards unambiguously reduce net social benefits the paper explores the possibility that minimum quality standards are a form of rent seeking behavior

product variety and the inefficiency of monopoly in this note the authors extend earlier work that examined the distortions in product quality created by a monopolist selling to consumers with different and unobservable tastes when consumers have differing absolute and marginal willingness to pay for quality they demonstrate that the monopolist may find it profitable to distort quality either at the low end or at the high end of a quality array this latter result has not previously been demonstrated the authors also provide intuitive comparative statics and discuss policy implications copyright 1988 by the london school of economics and political science

innovation and trade with endogenous market failure the case of genetically modified products a partial equilibrium two country model is developed to analyze implications from the introduction of genetically modified gm products in the model innovators hold proprietary rights farmers are competitive adopters some consumers deem gm food to be inferior in quality to traditional food and the mere introduction of gm crops affects the costs of non gm food because of costly identity preservation among the results derived it is shown that although gm innovations have the potential to improve efficiency some groups can be made worse off indeed it is even possible that the costs induced by gm innovations outweigh the efficiency gains

fiscal discriminations in three wars in 1790 a u s paper dollar was widely held in disrepute something shoddy was not worth a continental by 1879 a u s paper dollar had become as good as gold these outcomes emerged from how the u s federal government financed three wars the american revolution the war of 1812 and the civil war in the beginning the u s government discriminated greatly in the returns it paid to different classes of creditors but that pattern of discrimination diminished over time in ways that eventually rehabilitated the reputation of federal paper money as a store of value

imperfect price discrimination and welfare we develop a model in which a monopolist uses differences across consumers in their valuation of time to imperfectly price discriminate though it is customary to analyse price discrimination problems by the calculus of variations after postulating a continuum of types we assume a finite number of types and exploit the geometry and duality of the contract set and the structure of the programming specification we analyse in detail the qualitative properties of the model s solution and show by construction that our results exhaust the implications of the model for equilibrium contract pairs we show that imperfect discrimination is not bounded in welfare terms between perfect discrimination and single price monopoly and that the deadweight loss consumer surplus and output comparisons between single price monopoly and imperfect discrimination are ambiguous

a paradox of thrift in general equilibrium without forward markets after 2008 the us personal saving rate had its strongest postwar jump from 2 to 5 and the investment ratio its sharpest fall from its postwar average of 16 to its lowest level of 12 the coordination of saving and investment is analyzed here in a theoretical model of general equilibrium with rational expectations and no forward market shocks affect preferences for future consumption a paradox of thrift is proven that formalizes an argument in the general theory of keynes but the equilibrium is a constrained pareto optimum textbook fiscal policies are neutral at best or inefficient

on the importance of the supply side in demand side management we discuss how the structure of market supply affects the evaluation of policies to promote energy efficiency in household appliances if competitive markets offer the levels that consumers demand product standards inefficiently restrict choice if suppliers price discriminate minimum standards can restrict the inefficient use of energy intensity to segment consumers we also compare the effects of average intensity standards energy prices and innovation and consider what the different behavioral predictions imply for empirical studies of energy efficiency good policymaking requires knowing not only how consumers value energy efficiency in their decision making but also how producers respond to those values

international coordination and the effectiveness of aid this paper discusses and seeks to quantify the effects of improved donor coordination on aid effectiveness empirical estimates are first provided of the reductions in transaction costs that can be achieved by better donor coordination via concentration to fewer partner countries and a shift from project aid to programme based approaches further estimates are presented showing how much could be gained in terms of poverty reduction by optimizing aid allocation across countries the potential gains of a coordinated reallocation would be huge but there are severe political implementation constraints still the overall conclusion of the paper is that there are huge potential gains from donor coordination

stabilizing monetary injection policies abstract the primary concern of this paper is understanding how prices and interest rates respond to open market operations in a model economy developed by grossman and weiss but with more general utility functions we establish global existence of equilibrium paths and observe that prices and interest rates rise initially but thereafter oscillate around a new steady state also investigated are optimal monetary policies wherein injections take place in more than one time period and corresponding to which the equilibrium prices are most stable existence of such policies is established by mathematical analysis and its detailed structure explored by numerical simulation journal of economic literature classification numbers e50 e52

surplus distribution from the introduction of a biotechnology innovation we examine the distribution of welfare from the introduction of bt cotton in the united states in 1996 the welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits and makes it possible to partition these rents among consumers farmers and the innovating input firms we calculate a total increase in world surplus of 240 3 million for 1996 of this total the largest share 59 went to u s farmers the gene developer monsanto received the next largest share 21 followed by u s consumers 9 the rest of the world 6 and the germplasm supplier delta and pine land company 5

energy efficiency policy in a non cooperative world abstract in this paper we explore energy efficiency policies in the presence of a global environmental problem and international cost interdependency associated with r d activities we develop a simple model with two regions where the cost of an appliance in one region depends upon the level of energy efficiency in that region and the level of r d activities by the appliance industry in our model the cooperative outcome can be decentralized by imposing a tax on energy however we show that when regions do not cooperate they have an incentive to adopt additional instruments to increase energy efficiency the reason is that the lack of cooperation leads to under taxation of the environmental externality which in turn creates an incentive to try to reduce emissions produced abroad we illustrate this phenomenon with the californian vehicle greenhouse gas standards

consumer myopia imperfect competition and the energy efficiency gap evidence from the uk refrigerator market abstract the empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance we take a broader view and also consider the impact of imperfect competition using data on the uk refrigerator market 2002 2007 we find that the average energy consumption of appliances sold during this period was only 7 2 higher than what would have been observed under a scenario with a perfectly competitive market and non myopic consumers one reason for this small gap is that market power actually reduces energy use

the role of sales agents in information disclosure evidence from a field experiment with a large nationwide retailer we run a natural field experiment to measure the effects of energy use information disclosure customer rebates and sales agent incentives on demand for energy efficient durable goods although a combination of large rebates plus sales incentives substantially increases market share information and sales incentives alone each have zero statistical effect and explain at most a small fraction of the low baseline market share sales agents strategically comply only partially with the experiment targeting information to more interested consumers but not discussing energy efficiency with the disinterested majority these results suggest that seller provided information is not a major barrier to energy efficiency investments at current prices in this context data as supplemental material are available at http dx doi org 10 1287 mnsc 2015 2327 this paper was accepted by john list behavioral economics

quality leadership when regulatory standards are forthcoming in many markets governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them such quality leadership strategies often win public acclaim especially when they involve environmental attributes using a duopoly model of vertical product differentiation we show that if the high quality firm can commit to a quality level before regulations are promulgated it induces the regulator to weaken standards and welfare falls our results raise doubts about the social benefits of corporate self regulation and highlight the dangers of lengthy delays between legislative mandates for new regulations and their implementation

the origins of state capacity property rights taxation and politics economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes this paper develops a framework where policy choices in market regulation and taxation are constrained by past investments in legal and fiscal capacity it studies the economic and political determinants of such investments demonstrating that legal and fiscal capacity are typically complements the results show that among other things common interest public goods such as fighting external wars as well as political stability and inclusive political institutions are conducive to building state capacity some correlations in cross country data are consistent with the theory

allocative effects of financial assets and the long run neutrality of money when markets are incomplete abstract we analyze the allocative role of money as a numeraire in an intertemporal general equilibrium model with incomplete financial markets and nominal financial instruments it is shown that regardless of their return specification nominal assets in net supply increase the consumption risk and trigger an endogenous monetary process which diminishes the influence of these assets on the equilibrium allocation through time the nonneutrality of money claimed in the recent literature is a temporary phenomenon only asymptotically the traditional neutrality theorems are valid

downstream labeling and upstream price competition this paper analyses the economic consequences of labeling in a setting with two vertically related markets labeling on the downstream market affects upstream price competition through two effects a differentiation effect and a ranking effect the magnitude of these two effects determines who in the supply chain will receive the benefits and who will bear the burden of labeling for instance whenever the ranking effect dominates the differentiation effect the low quality upstream firm loses from labeling while all downstream actors are individually better off by decreasing the low quality input price the label acts as a subsidy and leads to an increase of the downstream market welfare this analysis furthers our understanding of the economic consequences of labeling in cases like those of gmos or restaurants

the relevance or otherwise of the central bank s balance sheet abstract this paper explores the impacts on an economy of a central bank changing the size and composition of its balance sheet one of the ways in which such asset purchases could influence prices and demand is via portfolio balance effects we develop and calibrate a simple olg model in which risk averse households hold money and bonds to insure against risk central bank asset purchases have the potential to affect households choices by changing the composition and return of their asset portfolios we find that the effect is weak and that its size depends on how fiscal policy is conducted that is not to say that the big expansion of central bank balance sheets in recent years has been ineffective our finding is rather that the portfolio balance channel evaluated in an environment of normally functioning though nonetheless incomplete asset markets is weak that is not inconsistent with the evidence that large scale asset purchases by central banks since 2008 have had significant effects because those purchases were made when financial markets were to varying extents dysfunctional nonetheless our results are relevant to those purchases because they may be unwound in an environment where financial markets are no longer dysfunctional

assets general equilibrium and the neutrality of money when government liabilities including money are held in private portfolios only as stores of value and do not provide additional services such as liquidity real variables are not affected by changes in the money supply due to the government s trading in real assets open market operations this neutrality of monetary policy fails if the government either trades in nominal assets or it distributes subsidies and levies taxes the ability of monetary policy to affect real variables is an important issue and has been the subject of numerous theoretical and empirical studies the most useful theoretical framework within which to address the problem is a model of asset markets where the demand for money or other government liabilities is determined by rational portfolio choice tobin 1958 these assets may of course provide additional services such as transactions and liquidity we assume here however that these services do not exist the standard argument for the effectiveness of monetary policy goes as follows changes in the supply of money affect the price level and hence the distribution of returns to money as an asset as individuals realign their portfolios and prices adjust to maintain market clearing the equilibrium holdings of physical assets change in this case money is not neutral we shall argue however that as long as changes in the supply of money are effected through the government s trading in real assets this argument is in general not valid it is well known that the effectiveness of monetary policy depends on the method of injection of new money into the economy two procedures are used by the government to effect changes in the supply of money it either trades in assets nominal or real open market operations or it distributes subsidies and levies taxes we show here that open market operations in real assets capital or indexed bonds have no effects on real variables in a general equilibrium model with market clearing the argument which can also be applied to the management of the public debt is presented in a most general framework in the next section it does not depend on the existence of a complete system of contingent securities or on an operative bequest motive furthermore it is compatible with incomplete and differential information the result is similar to the modigliani miller theorem in corporate finance that an argument along these lines can be employed to demonstrate the irrelevance of open

evaluating the costs and benefits of appliance efficiency standards the available empirical evidence does not provide a very convincing case that mandatory appliance efficiency standards will increase economic efficiency or reduce energy consumption significantly there is a real chance that such standards could actually reduce economic efficiency and possibly lead to an increase in energy use a broader use of programs to provide consumers with better information seems to represent the most productive short run strategy consumer education would not only help to improve decisions but it will also provide time to better assess consumer behavior allow the market to reveal the technical and economic possibilities for appliance efficiency improvements and ultimately allow public policies to be based on more than guesswork 12 references

why conditional aid does not work and what can be done about it abstract this paper studies a simple reform that introduces ex post incentives for the donor to reward good policies contrary to existing practices instead of committing aid to each recipient ex ante and making aid conditional on reform the donor centralizes the disbursement decision by committing aid to a group of countries the actual amount disbursed to each individual country would depend on its relative performance this explicit linkage of the allocation and disbursement decisions has two important advantages as compared to present practices first it raises the opportunity cost of disbursing aid ex post thereby giving the donor stronger incentives to reward good policies second competition among recipients allows the donor to make inferences about common shocks which otherwise conceal the recipient s choice of action this enables the donor to give aid more efficiently

a role for monetary policy when prices reveal information an example in an example monetary policy can determine the information revealed by prices and thus it can be effective monetary policy that varies only with public information can guarantee the full revelation of information at equilibrium which is optimal full indexation need not attain full revelation and as a consequence need not implement an optimal allocation

energy performance certificates and investments in building energy efficiency a theoretical analysis abstract in the european union energy performance certificates epcs provide potential buyers or tenants with information on a property s energy performance by mitigating informational asymmetries on real estate markets the conventional wisdom is that they will reduce energy use increase energy efficiency investments and improve social welfare we develop a model that partly contradicts these predictions although epcs always improve social welfare in the absence of market failures other than asymmetric information their impact on energy use and investments is ambiguous and depends both on the time horizon considered and the distribution of energy needs in the population this implies that in a second best world where energy externalities are under priced epcs can damage social welfare

minimum quality standards as a barrier to innovation abstract most models of minimum quality standards do not deal with the dynamic nature of regulation this note shows that presence of minimum quality standards may reduce firm incentives to innovate leading to a lower level of social welfare under regulation

a simple theory of advertising as a good or bad our analysis treats advertisements and the goods advertised as complements in stable metautility functions and generates new results for advertising by building on and extending the general analysis of complements by assimilating the theory of advertising into the theory of complements we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising we also use this approach to evaluate advertising from a welfare perspective whether there is excessive or too little advertising depends on several variables the effects on consumer utility the degree of competition in the market for advertised goods the induced changes in prices and outputs of advertised goods and whether advertising is sold to consumers

warning labels as cheap talk why regulators ban drugs abstract one explanation for drug bans is that regulators know more than consumers about product quality but why not just communicate the information in their ban perhaps via a would have banned label because product labeling is cheap talk any small market failure tempts regulators to lie about quality inducing consumers who suspect such lies to not believe everything they are told in fact when regulators expect market failures to result in under consumption of a drug and so would not ban it for informed consumers regulators ex ante prefer to commit to not banning this drug for uninformed consumers

where to draw lines stability versus efficiency what kinds of assets should financial intermediaries be permitted to hold what kinds of liabilities should they be allowed to issue should a government or a central bank offer explicit deposit insurance or implicit deposit insurance by acting as a lender of last resort this paper reviews how tensions involving stability versus efficiency and regulation versus laissez faire have for centuries run through macroeconomic analysis of these questions

the challenge of monetary theory departing from custom i want to address a problem that needs to be solved rather than one that has been solved i do not have much to contribute to its solution but i believe that the problem is important and want to focus attention on it in general terms the problem is to find appropriate conceptual foundations for monetary economics i believe that we do not as yet have a suitable theoretical framework for studying the functioning of a monetary system the main obstacle to the development of such a framework is our habit of thinking in terms of frictionless organized i e walrasian markets the problem is partly a problem of language the central concepts of economics demand supply and price are concepts that presuppose a system of centralized walrasian markets we are used to thinking in terms of these concepts and we tend to apply them rather automatically to the market for money frequently without realizing that the market for money must be a rather non walrasian market if indeed it can be called a market at all more or less all the models of monetary economics that are being used in practice proceed in this way using artifical adaptations of the walrasian centralized markets model to accommodate money without actually giving an account of what the role of money in the economy is the problem is one of pure economic theory however it bears on many important questions of applied economics and economic policy to study the relation between money income and prices we need a framework which gives a satisfactory account of the relation between the monetary system and the price mechanism to study the effects of central bank open market

the relevance of financial policy when the asset market is incomplete equilibrium allocations are not invariant to changes in the financial policies of firms in the presence of secondary assets such as options whose payoffs depend nonlinearly on the price of equity the range of attainable reallocations of revenue varies as a firm alters its position in the asset market corporate financial policy is thus relevant when assets are nominal monetary policy implemented through open market operations is also effective

price smoothing policies a welfare analysis in post wwii experience u s monetary authorities have attempted to eliminate seasonal fluctuations in prices and nominal interest rates developments in financial markets and recently discovered empirical regularities regarding the seasonal cycle seem to make these activities questionable using a money in the utility function model this paper analyzes the welfare properties of price and interest rate smoothing policies and the sense in which the distinction between seasonal and cyclical fluctuations is relevant it is shown that smoothing policies are welfare improving but not optimal and that the origin of the shocks not the persistence of the fluctuations is relevant in formulating policies

innocuous minimum quality standards abstract the present note shows that innocuous minimum quality standards namely below the lowest quality level in a market may have effects on equilibrium outcomes such a mqs reduces the incentive to invest in r d by the quality leading firm

stochastic inflation and government provision of indexed bonds abstract this paper examines the consequences of using indexed bonds as one of the government financing instruments along with money and taxes it is shown that open market operations between money and indexed bonds do not matter in a real sense despite their different risk characteristics increasing the share of indexed bonds in the government portfolio increases the volatility and the conditional mean of real rates of return on money when provided by means other than open market operations indexed bonds can affect the allocation of resources but these reallocations cannot be pareto improving

strength of protection for geographical indications promotion incentives and welfare effects we address the question of how the strength of protection for geographical indications gis affects the gi industry s promotion incentives equilibrium market outcomes and the distribution of welfare geographical indication producers engage in informative advertising by associating their true quality premium relative to a substitute product with a specific label emphasizing the gi s geographic origin the extent to which the names words of the gi label can be used and or imitated by competing products which depends on the strength of gi protection determines how informative the gi promotion messages can be consumers heterogeneous preferences vis a vis the gi quality premium are modeled in a vertically differentiated framework both the gi industry and the substitute product industry are assumed to be competitive with free entry the model is calibrated and solved for alternative parameter values results show that producers of the gi and of the lower quality substitute good have divergent interests gi producers are better off with full protection whereas the substitute good s producers prefer intermediate levels of protection but they never prefer zero protection because they benefit indirectly if the gi producers incentives to promote are preserved for consumers and aggregate welfare the preferred level of protection depends on the model s parameters with an intermediate level of protection being optimal in many circumstances

the ties that bind monetary policy and government debt management the financial crisis and subsequent economic recession led to a rapid increase in the issuance of public debt but large scale purchases of bonds by the federal reserve and other major central banks have significantly reduced the scale and maturity of public debt that would otherwise have been held by the private sector we present new evidence that tilting the maturity structure of private sector holdings significantly influences term premia even outside crisis times our framework helps explain both the bond yield conundrum and the effectiveness of quantitative easing we suggest that these findings raise two important policy questions one is should a central bank contrary to recent orthodoxy use its balance sheet as an additional complementary instrument of monetary policy to influence as part of the monetary transmission mechanism the long term interest rate the second is how should central banks and governments ensure that debt management properly takes account of the implications for both monetary and financial stability

expectations and the nonneutrality of lucas abstract this paper was written to kick off the conference celebrating the anniversary of lucas s expectations and the neutrality of money it recalls the state of macroeconomics in the late 1960 s cites some technical and substantive precursors of lucas s idea and explores the legacies of the equilibrium concept monetarism fiscalism and standards proposed in lucas s paper

on the economics of labels how their introduction affects the functioning of markets and the welfare of all participants are labels good or bad for consumers and firms the answer may seem straightforward since labels improve information yet economic theory reveals situations where their introduction reduces the welfare of at least some market participants this essay reviews the theoretical literature on labels in order to identify and explain the main reasons that may cause labeling to produce undesirable side effects in contrast to earlier reviews that either concentrate on narrow topics or treat the subject in a more or less informal way we bring together the main results from all the relevant topics by presenting and discussing the assumptions and model building techniques that underpin them the advantage of this approach is that it identifies the origin of the differences between results thus allowing the synthesis of results that sometimes appear even to be contradictory we focus on quality labels and examine the impact of labeling on market structure the side effects of costly certification issues related to the label s trustworthiness the rationale for mandatory vs voluntary labeling the level at which the label s standard is set according to the agency that selects it the political economy of labels that is pro or anti label lobbying lobbying to affect the label s standard and lobbying in favor or against the label s mandatory imposition these topics cover a wide range of applications including genetically modified organism gmos organic produce geographic indicators controlled origin eco labels etc we conclude by identifying topics that require further research

aid fragmentation and effectiveness what do we really know summary aid fragmentation is widely recognized as being detrimental to development outcomes we reinvestigate the impact of fragmentation in the context of growth bureaucratic policy and education focusing on a number of conceptually different indicators of fragmentation and paying attention to potentially heterogeneous effects across countries sectors and channels of influence our systematic and detailed reexamination of existing empirical studies shows that this differentiation is crucial in some sectors such as primary education donor concentration or limiting donor numbers appear to be detrimental rather than beneficial for development outcomes in other areas we find the expected negative effect but only when we conceptualize fragmentation as a lack of lead donors too limited concentration rather than in terms of donor numbers in all cases sufficient initial administrative capacity in recipient countries prevents the negative and reinforces the positive effects of fragmentation this stresses the importance of questioning the sweeping conclusions drawn by much of the previous literature based on what we currently know generalizing judgments about the effect of aid fragmentation may be misleading

the multiproduct firm quality choice and regulation a monopolist facing a market of heterogeneous consumers will distort the quality a rray this paper explores three regulatory remedies minimum quality s tandards mqs maximum price regulation mpr and rate of return re gulation rorr that can counteract this distortion mqs and mpr rais e the quality offered to consumers with a low willingness to pay for quality while mqs have no effect on the quality offered to consumers with a high willingness to pay mpr decreases the quality offered to this group if production of high low quality goods is capital i ntensive rorr increases decreases the quality offered to both grou ps copyright 1988 by blackwell publishing ltd

do open market operations matter theory and evidence from the second bank of the united states abstract modigliani miller theorems for open market operations describe conditions under which central bank portfolio rearrangements will have no consequences for allocations relative prices or the time path of the price level such theorems for government owned central banks have limited applicability and hence are difficult to test we develop a modigliani miller theorem for privately owned central banks and test its implications using data from the second bank of the united states the data are consistent with an absence of price level effects due to open market operations and are inconsistent with standard versions of the quantity theory of money

energy efficiency subsidies with price quality discrimination abstract we compare various designs of energy efficiency subsidies in a market subject to both energy use externalities and price quality discrimination by a monopolist we find that differentiated subsidies can establish the social optimum unlike per quality regimes ad valorem regimes generate downstream interferences subsidising of the high end good leads the monopolist to reduce the quality of the low end good for this reason ad valorem differentiated rates should always decrease with energy efficiency a result seemingly at odds with actual practice in contrast with per quality differentiated subsidies the rates can increase if the externality is large enough relative to the market share of low type consumers contrary to differentiated subsidies what we shall call single instrument subsidies only achieve second best outcomes a uniform ad valorem subsidy should have a rate higher than that needed to specifically internalise energy use externalities lastly if as is often observed in practice only the high end good is to be incentivised a per quality regime should be preferred to an ad valorem one an ad valorem tax on the high end good may even be preferred to an ad valorem subsidy if the externality is small enough and low end consumers dominate the market

long term diversification paths and energy transitions in europe the concentration of the energy mixes of eight european countries is measured latecomers historically enjoyed lower levels of concentration in their energy mixes early comers followed an inverted u path of concentration latecomers a u path a time effect and size effect explains the different patterns small energy consuming countries will be able to do faster transitions

political conditionality and foreign aid this article argues that a new generation of political conditionalities has emerged during the last decade this requires an expansion of the original definition and research agenda beyond the traditional questions of use and effectiveness however there is also a need to dig deeper into the dynamics surrounding political conditionalities particularly the bargaining processes and outcomes along the aid chain from domestic donor politics donor harmonization fora policy dialog spaces to the political economy of recipient institutional reform and donor coping strategies because they influence the set up use follow up purpose and effectiveness of pcs

the dynamics of inflation with constant deficit under expected regime change a model that describes the dynamics of inflation with a fully anticipated stabilization program is developed it is shown that with a constant deficit an economy tends to stay at the neighborhood of the lower of the two state inflation rates that are compatible with the deficit further increasing inflation rates prior to the stabilization are compatible only with deficits that are lower than the maximal feasible staedy state deficits and with a stabilization program that reduces the demand for real balances if these conditions are not met inflation decreases towards the stabilization date it is argued that the data generated by actual inflationary episodes fit the conditions described above and corroborate the model this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

quality distortion by a discriminating monopolist the standard model of monopolistic imperfect quality discrimination involving consumer self selection has shown that no distortion occurs at the highest quality level while all lower quality levels are degraded in order to maintain profitable market segmentation this result flows from the assumption that consumers with a higher total utility of quality also have a higher marginal utility of quality the paper develops a reasonable model in which the standard assumption is not satisfied and this alternative model yields vastly different conclusions regarding the form of quality distortion in particular quality may be enhanced not degraded to maintain profitable market segmentation copyright 1989 by american economic association

politics and the effectiveness of foreign aid abstract critics of foreign aid programs have long argued that poverty reflects government failure in this paper i test predictions for aid effectiveness based on an analytical framework that relates aid effectiveness to political regimes i find that aid does not significantly increase investment nor benefit the poor as measured by improvements in human development indicators but it does increase the size of government the impact of aid does not vary according to whether recipient governments are liberal democratic or highly repressive but liberal political regimes and democracies ceteris paribus have on average 30 lower infant mortality than the least free regimes this may be due to greater empowerment of the poor under liberal regimes even though the political elite continues to receive the benefits of aid programs an implication is that short term aid targeted to support new liberal regimes may be a more successful means of reducing poverty than current programs

geographical indications and the competitive provision of quality in agricultural markets the economics of geographical indications gis is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture it is assumed that certification costs are needed for gis to serve as collective credible quality certification devices and production of high quality product is endogenously determined we find that gis can support a competitive provision of quality and lead to clear welfare gains although they fall short of delivering the constrained first best the main beneficiaries are consumers producers may also accrue some benefit if production of the high quality products draws on scarce factors that they own copyright 2008 oxford university press

a new way of thinking about the current account extending the theory of generational accounts the author shows that the conventional current account is not related to the real effects of a country s fiscal policy for any international array of fiscal policies a country can implement its own policy so that the conventional government and current account deficits are zero in every period the author argues that economists should develop a new measure of the current account this measure is forward looking and keeps track of expected transfers between countries copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

import competition product quality reversal and welfare abstract we investigate product quality in an import competing country using the framework of vertical product differentiation comparison of three polices suggests that the quality based r d subsidy brings quality reversal leading to a win win win equilibrium in consumer surplus domestic profit and social welfare

contracting for aid abstract foreign aid is analyzed as a contract where the north gives a transfer to the south in return for poverty reduction regarded as an international public good the issue of conditionality is first discussed in a moral hazard framework and then under asymmetric information about the degree of altruism of the government of the south additional actors like local ngos and multilateral aid institutions are then added to the model the optimal contracts to avoid free riding or collusion are then presented

duopoly and quality standards abstract in the absence of sunk costs a low quality producer benefits from a mildly restrictive quality standard whereas a high quality producer suffers from it consumers welfare increases if the firm producing the higher quality does not increase its quality significantly in response to the increase in quality by its rival a sufficiently severe standard causes exit from the industry when there are no sunk cost the high quality producer exits first

on the equivalence of private and public money abstract when does a swap between private and public money leave the equilibrium allocation and price system unchanged to answer this question the paper sets up a generic model of money and liquidity which identifies sources of seignorage rents and liquidity bubbles we derive sufficient conditions for equivalence and apply them in the context of the chicago plan cryptocurrencies the indian de monetization experiment and central bank digital currency cbdc our results imply that cbdc coupled with central bank pass through funding need not imply a credit crunch nor undermine financial stability

impacts of minimum quality standards imposed through marketing orders or related producer organizations we analyze the impacts of minimum quality standards mqs imposed by producers acting collectively through a producer organization such as a marketing order mqs imposed in a competitive market can never enhance social welfare because in general an mqs creates two deadweight losses one due to inefficient enhancement of product quality and a second due to wastage of the low quality product any mqs that a competitive industry implements based upon a profit criterion causes all consumers in the market to be harmed however an mqs may be preferred relative to supply control as a second best instrument for transferring income to producers