purchasing power parity based on effective exchange rate and cointegration 25 ldcs experience with its absolute formulation abstract with the development of cointegration technique the purchasing power parity ppp theory has received renewed attention most studies have tested the theory by using data from developed countries dcs and some high inflation less developed countries ldcs they have mostly rejected its empirical validity in this paper we use the concept of effective exchange rate and quarterly data over 1973 1988 to examine the experience of 25 ldcs for most countries we found little empirical support for the ppp

the solution to the tullock rent seeking game when r 2 mixed strategy equilibria and mean dissipation rates in tullock s rent seeking model the probability a player wins the game depends on expenditures raised to the power r we show that a symmetric mixed strategy nash equilibrium exists when r 2 and that overdissipation of rents does not arise in any nash equilibrium we derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete and show that full rent dissipation occurs when the strategy space is continuous our results are shown to be consistent with recent experimental evidence on the dissipation of rents

preemptive rent seeking and the social cost of monopoly power abstract monopoly power evokes rent seeking aimed at supplanting an incumbent monopolist as well as preemptive rent seeking by incumbents concerned with deterring entry of potential competitors using an illustrative example where preemptive rent seeking takes the form of excess capacity this note makes the point that the relation between the value of resources expended in the two types of rent seeking activity determines whether exposure of an incumbent monopolist to the discipline of potential competition reduces the social cost of monopoly power

joseph schumpeter lecture ideology i develop a model of ideologies as collectively sustained yet individually rational distortions in beliefs concerning the proper scope of governments versus markets in processing and interpreting signals of the efficacy of public and market provision of education health insurance pensions etc individuals optimally trade off the value of remaining hopeful about their future prospects or their children s versus the costs of misinformed decisions because these future outcomes also depend on whether other citizens respond to unpleasant facts with realism or denial endogenous social cognitions emerge thus an equilibrium in which people acknowledge the limitations of interventionism coexists with one in which they remain obstinately blind to them embracing a statist ideology and voting for an excessively large government conversely an equilibrium associated with appropriate public responses to market failures coexists with one dominated by a laissez faire ideology and blind faith in the invisible hand with public sector capital this interplay of beliefs and institutions leads to history dependent dynamics the model also explains why societies find it desirable to set up constitutional protections for dissenting views even when ex post everyone would prefer to ignore unwelcome news jel h11 d72 d83 p16 z1

are shocks to real effective exchange rates permanent or transitory evidence from pacific island countries in this article we consider the stability of the real effective exchange rates for four pacific island countries using the lee and strazicich 2003a b unit root test which allows one to incorporate at most two structural breaks in the data series our main finding is that for papua new guinea and samoa exchange rates are stable implying that shocks will have a transitory effect on real effective exchange rates while for fiji and the solomon islands we find exchange rates to be unstable implying that shocks will have a permanent effect on real effective exchange rates

correlation neglect voting behavior and information aggregation in this paper we analyse elections when voters underestimate the correlation between their information sources correlation neglect we find that this cognitive bias can improve political outcomes we show that the extreme beliefs which result from correlation neglect induce some voters to base their vote on information rather than on political preferences we characterise conditions on the distribution of preferences under which this induces higher vote shares for the optimal policies and better information aggregation

strategic restraint in contests abstract economic policy is modelled as the outcome of a political game between two interest groups the possible ex post realized outcomes in the game correspond to the proposed policies in the literature policy proposals are exogenous we extend such games by allowing the endogenous determination of the proposed policies in a first stage the groups decide which policy to lobby for and then in a second stage engage in a contest over the proposed policies our main result is that competition over endogenously determined policies induces strategic restraint that reduces polarization and in turn wasteful lobbying activities

how to win the political contest a monopolist vs environmentalists this paper sheds light on the political economy of local energypolitics both from a theoretical and an empirical perspective first a case study of a small town in southern germany schonau is presented where environmentalists have won thepolitical contest against the regional energy monopolist and havefounded an energy supply firm themselves the different stagesof the political process are explained and analysed second apolitical economy model is developed where environmentalists anda monopolistic utility firm confront each other both on thepolitical and on the energy market in the lobbying equilibriumthe probability of the environmentalists winning the gamedepends on the monopoly rent and the perceived social costs ofenergy production it is shown that it is optimal for themonopolist to reduce his output below the monopolistic output finally the winning strategy in the schonau case is discussedin the light of the theoretical results of the paper

price discrimination in a rent seeking economy this paper examines the incentive and the consequences of using discriminatory pricing by a monopolist in a rent seeking economy it is shown that even if all consumer groups demands have identical elasticities at any given price the monopolist has an incentive to charge a lower price to high pressure consumer groups so as to alleviate their rent seeking efforts in challenging its monopolistic power furthermore it is shown that by allowing the firm to price discriminate total welfare may increase even if all rent seeking expenditures are completely wasteful

expressive voting and electoral equilibrium there are two rival accounts of rational voting in the public choice tradition the mainstream instrumental account that sees the vote as a revelation of preference over possible electoral outcomes essentially analogous to a market choice and the expressive account that sees the vote as expressing support for one or other electoral options rather like cheering at a football match this paper attempts to lay out some of the implications of the expressive account of voting for the issue of who votes as well as for the nature of political equilibrium and to compare these implications with those derived from the instrumental account we also identify and discuss the alternative views of the domain of electoral politics associated with the instrumental and expressive accounts of voting and sketch a route towards the integration of expressive and instrumental ideas in the analysis of rational electoral politics

political internalization of economic externalities and environmental policy abstract this paper derives the characteristics of endogenous environmental policy in a common agency model of politics and proceeds to show that competition between lobby groups is an important source of internalization of economic externalities our analysis generalizes bhagwati s principle of targeting to the case of distorted political markets moreover we show that the politically optimal structure of environmental taxes incorporates a pigouvian adjustment however since lobby groups care about the distribution of income as well as about efficiency the equilibrium structure of taxes differs considerably from the pigouvian rule

the collapse of purchasing power parities during the 1970 s one of the striking facts concerning the relationship beiveen prices and exchange rates during the 1970 s has been the dismal performance of the predictions of the simple versions of the purchasing power parity doctrine ppp that doctrine in its absolute version states that the equilibrium exchange rate between domestic and foreign currencies equals the ratio of domestic to foreign price levels the relative version of the doctrine relates equilibrium changes in exchange rates to changes in the ratio of domestic to foreign prices during the 1970 s short run changes in exchange rates bore little relationship to short run differentials in national inflation rates and frequently divergences from purchasing power parities have been cumulative this paper reviews and analyzes the empirical record of exchange rates and prices during the 1970 s and the analysis is based on the experience of the dollar pound the dollar frecch franc and the dollar dm exchange rates section 2 presents the evidence on ppp during the 1970 s and contrasts it with the evidence from the 1920 s a period during which the doctrine held up reasonably well this analysis is relevant for assessing whether the flexible exchange rate system was successful in providing national economies with an added degree of insulation from foreign shocks and whether it provided policymakers with an added instrument for the conduct of macroeconomic policy the evidence regarding devia tions from purchasing power parities is also relevant for determining whether there is a case for managed float section 3 attempts to explain what went wrong with

a model of positive self image in subjective assessments this paper suggests a mechanism that describes individuals positive self image in subjective assessments of their relative abilities the mechanism assumes individuals have heterogeneous production functions that determine ability as a function of multiple skills make skill enhancing investments with the goal of maximizing their ability and make ability comparisons using their own production function within this framework the paper provides conditions under which there is positive self image positive self image is increasing in the ease of the task the number of different skills needed for the task and the variability of production technologies in the population

a theory of participation in elections we analyze a model of participation in elections in which voting is costly and no vote is pivotal ethical agents are motivated to participate when they determine that agents of their type are obligated to do so unlike previous duty based models of participation in our model an ethical agent s obligation to vote is determined endogenously as a function of the behavior of other agents our model predicts high turnout and comparative statics that are consistent with strategic behavior jel d72

new evidence on purchasing power parity from 17 oecd countries there is a large literature that investigates whether or not real exchange rates are stationary in an attempt to unravel support for purchasing power parity ppp at best the empirical results are mixed this paper applies a unit root test that allows for a simultaneous structural break in the intercept and slope shown by sen 2003 to minimize power distortions to examine ppp for 17 oecd countries our results on ppp are mixed when the real exchange rate is based on the us dollar evidence is found of ppp for only france portugal and denmark when the real exchange rate is based on the deutschmark we find evidence of ppp for austria belgium norway spain netherlands switzerland and denmark

ideological segregation online and offline we use individual and aggregate data to ask how the internet is changing the ideological segregation of the american electorate focusing on online news consumption offline news consumption and face to face social interactions we define ideological segregation in each domain using standard indices from the literature on racial segregation we find that ideological segregation of online news consumption is low in absolute terms higher than the segregation of most offline news consumption and significan tly lower than the segregation of face to face interactions with neighbors co workers or family members we find no evidence that the internet is becoming more segregated over time

purchasing power parity in less developed and transition economies a review paper abstract the concept of purchasing power parity ppp has been the subject of numerous studies many of which have been unable to prove conclusively this core principle of international finance although industrialized countries have received most of the attention studies that focus on less developed and transition economies have also attained mixed results this study surveys trends in this branch of the literature highlighting the econometric advances that have sought to solve this puzzle while pointing out that more needs to be done to address the reasons that might cause ppp not to hold

does the exchange rate follow a random walk a monte carlo study of four tests for a random walk abstract several authors have urged that real and nominal exchange rates follow a random walk conditions under which the exchange rate follows a random walk are reviewed in this paper many of these do not appear to hold therefore the empirical evidence presents a puzzle some evidence suggets the exchange rate follows a random walk while other evidence suggests the opposite should be true this paper attempts to reconcile the evidence it is argued that the tests for a random walk have low power monte carlo evidence on four tests for a random walk is presented that suppors this claim

explaining voter turnout patterns an information theory voting research is rich in empirical regularities yet a parsimonious theory of voter turnout that can match the facts has proven to be elusive this paper argues that voter turnout patterns can be explained by extending the traditional rational voter model to include limited information a model is presented in which utility maximizing consumers receive higher payoffs from voting the more confident they are of their vote choice the model provides an explanation for the most important cross sectional voter turnout patterns in addition it suggests a novel explanation for the post 1960 decline in u s participation

social mobility and redistributive politics just like economists voters have conflicting views about redistributive taxation because they estimate its incentive costs differently we model rational agents as trying to learn from their dynastic income mobility experience the relative importance of effort and predetermined factors in the generation of income inequality and therefore the magnitude of these incentive costs in the long run left wing dynasties believing less in individual effort and voting for more redistribution coexist with right wing dynasties this allows us to explain why individual mobility experience and not only current income matters for political attiitudes and how persistent differences in perceptions about social mobility can generate persistent differences in redistribution across countries

rent seeking firms consumer groups and the social costs of monopoly i introduction when a positive monopoly rent is secured under government protection firms compete with one another to win the monopoly by expending resources the opportunity costs of such rent seeking activities the values of goods and services that could be produced with resources expended on such rent seeking activities are part of the social costs of monopoly many economists have examined the social costs of monopoly defining them as the sum of the deadweight loss and the firms rent seeking costs examples include tullock 1967 krueger 1974 posner 1975 rogerson 1982 and fisher 1985 1 recently several economists such as wenders 1987 ellingsen 1991 and schmidt 1992 have pointed out that consumers do not always allow government protection of a monopoly rather consumers often seek government protection of themselves they try to defend their consumer surplus against a monopoly by spending resources for example consumers often lobby politicians for government regulation that requires a natural monopolist to set its price below the unregulated profit maximizing level the opportunity costs of such consumer surplus defending henceforth cs defending activities are also part of the social costs of monopoly an interesting question then becomes whether consumers cs defending activities increase or decrease the social costs of monopoly as compared with those incurred in the case of inactive consumers wenders 1987 argues that consumers cs defending activities lead to higher social costs of monopoly on the other hand ellingsen 1991 and schmidt 1992 show that consumers participation to defend their consumer surplus lowers the social costs of monopoly this paper also addresses the question of whether consumers cs defending activities increase or decrease the social costs of monopoly but differs from previous research by analyzing a model in which the government decides first whether or not to regulate a monopoly and then decides which firm to be the monopolist 2 we compare the social costs of monopoly in the case of active consumers with those incurred in the case of inactive consumers we demonstrate that given just one rent seeking firm consumers cs defending activities generally increase the social costs of monopoly but given two or more rent seeking firms such activities generally reduce the social costs of monopoly section ii sets up the basic model we consider a rent seeking and cs defending henceforth rcs contest with one consumer group it has two stages in the first stage firms and the consumer group compete by expending outlays to win their prizes 3 the prize for each firm is an unregulated monopoly and that for the consumer group is a regulated monopoly each firm and the consumer group choose their outlays simultaneously and independently in the second stage after knowing the government s decision on the form of the monopoly the firms compete against each other to win the monopoly they expend their outlays simultaneously and independently at the end of the second stage the government chooses the winning firm ellingsen 1991 argues that his sequential move framework is more realistic than his simultaneous move framework since in most cases consumers compete against existing monopolists rather than potential ones over the forms of monopolies in his sequential move framework potential monopolists first compete to win the monopoly and then the winner and consumers compete over the form of the monopoly however consider a situation in which the government periodically reassigns a monopoly in this situation consumers compete against potential monopolists including the incumbent monopolist over the form of the monopoly and the firms periodically compete to be the monopolist the sequential move game in this paper is more appropriate for this situation than the sequential move game of ellingsen 1991

seeking rents by setting rents the political economy of rent seeking in recent years there has been a large number of papers on the subject of rent seeking most such works on rent seeking have taken the rent as exogenously determined by regulators regulators howeve r may also be expected and indeed have been shown to be rent seeke rs and hence the determination of the rent itself should be endogeniz ed to reflect the fact that the rent setters are themselves rent se ekers in this paper the authors do this by presenting an analysis o f the interaction of regulators firms and consumers within a rent s eeking framework where all three groups are assumed to be self motiva ted the analysis is carried out under alternative assumptions regard ing the nature of the market and the reaction functions of the partic ipants policy implications are drawn where appropriate copyright 1987 by royal economic society

why do forecasters disagree lessons from the term structure of cross sectional dispersion abstract key sources of disagreement among economic forecasters are identified by using data on cross sectional dispersion in forecasters long and short run predictions of macroeconomic variables dispersion among forecasters is highest at long horizons where private information is of limited value and lower at short forecast horizons moreover differences in views persist through time such differences in opinion cannot be explained by differences in information sets our results indicate they stem from heterogeneity in priors or models differences in opinion move countercyclically with heterogeneity being strongest during recessions where forecasters appear to place greater weight on their prior beliefs

rent dissipation through self regulation the social cost of monopoly under threat of reform this piece offers an alternative perspective on the social cost of monopoly and rent seeking an existing monopolist whose right is contested in a political market has an incentive to expend resources on direct lobbying efforts while also attempting to defuse reformist opposition because the strength of reformist opposition will generally be a function of the monopolist s past present and expected future pricing output decisions such opposition is endogenous the probability that an existing monopoly right will be retained depends on both direct lobbying efforts by the monopolist as well as the strength resolve and cohesiveness of the reformers by modifying its output pricing decision and in effect engaging in self regulation the monopolist gives up current profits in exchange for the expected future profits associated with retaining its monopoly rights such opposition dissipating effort is a form of indirect rent seeking that is complementary to direct lobbying efforts and unlike the tullock costs implied by the incumbent s direct lobbying this form of indirect rent seeking may imply a reduction in the social cost of monopoly

a group rule utilitarian approach to voter turnout theory and evidence this paper explores a group rule utilitarian approach to understanding voter turnout inspired by the theoretical work of john c harsanyi 1980 and timothy j feddersen and alvaro sandroni 2002 it develops a model based on this approach and studies its performance in explaining turnout in texas liquor referenda the results are encouraging the comparative static predictions of the model are broadly consistent with the data and a structurally estimated version of the model yields reasonable coefficient estimates and fits the data well the structurally estimated model also outperforms a simple expressive voting model

panel unit root tests of purchasing power parity for price indices abstract this paper adopts four panel unit root tests to evaluate ppp over the floating period for six different price indices results generally support ppp albeit the speeds of adjustment differ considerably between price indices and test procedures the degree of contemporaneous and serial correlation as well as heterogeneity of the series in the panel affect stationarity and the speed of mean reversion

are asian real exchange rates mean reverting evidence from univariate and panel lm unit root tests with one and two structural breaks there are a number of studies that examine the purchasing power parity ppp hypothesis the empirical findings from the extant literature for the ppp hypothesis are mixed this article applies univariate and panel lagrange multiplier lm unit root tests with one and two structural breaks to real exchange rates for 15 asian countries the univariate lm unit root tests find evidence of ppp for two thirds of the sample the results from the panel lm unit root test support long run ppp for the asian countries in the sample the results from the lm panel unit root tests differ from those of existing panel unit root tests of ppp for asian countries that have not allowed for the existence of structural breaks

testing for absolute purchasing power parity abstract purchasing power parity ppp is an equilibrium condition equating the nominal exchange rate between two countries with the relative price of an identical bundle of goods in each country previous time series researchers use price indices to study ppp so they test relative ppp we use new data that measures price levels so we test absolute ppp price levels provide a test of absolute ppp because unlike price indices price levels do not contain a base period in which the nominal exchange rate equals the price ratio by construction we find support for absolute ppp

are bilateral real exchange rates stationary evidence from lagrange multiplier unit root tests for india the paper examines the stationarity of india s real exchange rate vis a vis 16 of its major trading partner countries for the period 1960 2000 application of the conventional adf unit root test the lagrange multiplier lm unit root test with one structural break and the lm unit root test with two structural breaks provides evidence that india s exchange rate vis a vis 15 out of 16 countries is stationary implying support for purchasing power parity

the political economy of environmental regulation towards a unifying framework there are several theories that attempt to explain various aspects of environmental policy building on insights from this theoretical work and recent advances in our understanding of instrument performance this paper constructs a more complete theory of environmental regulation there are two primary contributions of this research the first is to provide more satisfactory explanations for a number of observed patterns of environmental policy for example there is as yet no satisfactory theory about the emergence of incentive based mechanisms such as marketable permits and effluent fees the second contribution of this paper is to develop a parsimonious framework for understanding many important aspects of environmental policy this framework suggests the outputs of environmental policy emerge from a struggle between key interest groups

do malaysian house prices follow a random walk evidence from univariate and panel lm unit root tests with one and two structural breaks in this article we apply univariate and panel lagrange multiplier lm unit root tests with one and twostructural breaks proposed by lee and strazicich 2003 2004 and im et al 2005 to examine housing prices for five different housing price indices all housing detached housing semi detached housing terrace housing and high rise housing in 14 states of malaysia to test whether housing prices exhibit a random walk our main finding from the univariate lm unit root tests is that for the vast majority of states housing prices follow a stationary process about a segmented trend the results of the panel lm unit root tests provide overwhelming evidence that house prices are segmented trend reverting

would you trust lobbies we consider the regulatory problem to approve or to ban a new product technology in the context of scientific controversy about its detrimental environmental and or health effects we formalize the regulator s decision making process as a tullock contest towards a theory of the rent seeking society texas a m university press texas 1980 the contestants being an industrial lobby representing the economic agents who have developed the new product technology and an environmental lobby representing the economic agents who will be harmed by the product or technology assuming that the industrial lobby has private information about the unfavorable environmental and or health effects but can be held liable for damage ex post we derive the equilibrium properties of the contest in particular we derive conditions under which it is socially preferable for the regulator to decide according to the contest s outcome rather than according to an ex ante cost benefit analysis using his prior beliefs we find that the contest outperforms the ex ante cost benefit analysis only if the risk of judgment proofness is not too high

purchasing power parity abstract this paper examines the purchasing power parity henceforth ppp using historical data and the cointegration approach the results indicate that the exchange rate is cointegrated with the wholesale price index wpi ratio but not with the consumer price index cpi ratio the cointegrating vector is close to 0 1 for the cpi based real exchange rates however we cannot reject the random walk hypothesis the findings caution us on the use of general price indexes that give a large weight to nontraded goods and are therefore subject to long run deviations from ppp

bandwagons and momentum in sequential voting in this paper i show that an equilibrium exists to the sequential voting game in which a bandwagon begins with probability 1 these bandwagons are driven by a combination of beliefs and the desire of voters to vote for the winning candidate significantly in this equilibrium the pivot probability for each voter is non zero even in an infinite population consequently the bandwagons do not always start after one or at most two favourable decisions as do economic cascades and varying levels of informative voting are observed consistent with observations from sequential voting in u s presidential primaries further voters are exposed to counterintuitive incentives referred to as buyers remorse that have been attributed to real primary voters i also derive equilibrium behaviour in this environment when voting is simultaneous and compare the quality of information aggregation within each mechanism i relate the conclusions to u s presidential primaries and find they are consistent with a common conclusion about the front loading of the primary process that in tight elections with no front runner simultaneous voting is preferred whereas in lopsided elections sequential voting is preferred the superior performance of sequential voting in lopsided races is precisely because bandwagons occur copyright 2007 wiley blackwell

context dependent voting and political ambiguity abstract in recent decades psychologists have shown that the standard model of individual choice is often violated one regularly observed violation is that choices are influenced by the decision context to incorporate these effects into politics we introduce a theory of context dependent voting and apply it to the puzzle of why candidates are so frequently ambiguous in their policy pronouncements we show that context dependent voters develop a taste for ambiguity even when they evaluate distances quadratically and exhibit traditional risk aversion turning to aggregate effects we incorporate context dependent voting into a model of electoral competition and show that strategic candidates respond in equilibrium to context dependent voters by offering ambiguous platforms thereby affecting the policy outcome

overconfidence in political behavior this paper studies theoretically and empirically the role of overconfidence in political behavior our model of overconfidence in beliefs predicts that overconfidence leads to ideological extremeness increased voter turnout and stronger partisan identification the model also makes nuanced predictions about the patterns of ideology in society these predictions are tested using unique data that measure the overconfidence and standard political characteristics of a nationwide sample of over 3 000 adults our numerous predictions find strong support in these data in particular we document that overconfidence is a substantively and statistically important predictor of ideological extremeness voter turnout and partisan identification jel c83 d03 d72 d83

a rent seeking model of voluntary overcompliance addendum in a previous paper haan in environ resour econ 2016 i missed some relevant literature essentially related to that paper in this addendum i discuss how two earlier contributions graichen et al in public choice 108 273 293 2001 liston heyes in j environ econ manag 41 1 12 2001 are related to haan environ resour econ 2016 and how haan environ resour econ 2016 differs from those contributions

long run purchasing power parity during the recent float abstract this paper examines the relevance of long run purchasing power parity ppp which allows for measurement errors during the recent floating exchange rate period previous empirical studies generally fail to find support for long run ppp over this period in this paper in this paper the cointegration property of exchange rates and prices is examined using maximum likelihood procedure and we find significant evidence favorable to long run ppp further tests for symmetry and proportionality indicate that these two conditions are not generally with the data the results support the hypothesis of long run ppp with measurement errors in prices

the black market for dollars in brazil the model of the black market for dollars focuses on the interaction of portfolio decisions relevant to the holding of asset stocks and the determinants of net flows of dollars associated with tourism and smuggling a partial equilibrium model of the black market shows that the level of the premium is determined by the official real exchange rate and the official depreciation adjusted interest differential as well as seasonal factors associated with tourism expectations of future exchange rate changes under rational expectations are shown to affect the current level of the black market premium the empirical evidence provides ample support for the role of the key determinants of the premium as well as for an important seasonal pattern the magnitude of the seasonal variation is evidence of the imperfect substitutability between black dollars and cruzeiro assets in portfolios

overconfidence and excess entry an experimental approach psychological studies show that most people are overconfident about their own relative abilities and unreasonably optimistic about their futures e g shelly e taylor and j d brown 1988 neil d weinstein 1980 when assessing their position in a distribution of peers on almost any positive trait like driving ability ola svenson 1981 income prospects or longevity a vast majority of people say they are above the average although of course only half can be if the trait is symmetrically distributed this paper explores whether optimistic biases could plausibly and predictably influence economic behavior in one particular setting entry into competitive games or markets many empirical studies show that most new businesses fail within a few years for example using plant level data from the u s census of manufacturers spanning 1963 1982 timothy dunne et al 1988 estimated that 61 5 percent of all entrants exited within five years and 79 6 percent exited within 10 years most of these exits are failures see also dunne et al 1989a 1989b d shapiro and r s khemani 1987

a structural model of turnout and voting in multiple elections this paper develops a unified approach to study participation and voting in multiple elections the theoretical setting combines an uncertain voter model of turnout with a spatial model of voting behavior we apply our framework to the study of turnout and voting in u s presidential and congressional elections we structurally estimate the model using individual level data for the 2000 elections and quantify the relationships between observed individual characteristics and unobserved citizens ideological preferences information and civic duty we then use the estimated model which replicates the patterns of abstention selective abstention split ticket voting and straight ticket voting observed in the data to assess the effects of policies that may increase citizens information and sense of civic duty on their turnout and voting behavior

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

cointegration tests of purchasing power parity in africa abstract despite two decades of implementing economic reforms there is still a significant gap between official and black market exchange rates in africa african policy makers continue to implement exchange rate policies based largely on the assumption that purchasing power parity ppp holds this paper examines whether there is empirical support for ppp in africa we used johansen s cointegration technique and error correction modeling on annual data for black market exchange rates and cpi in 30 countries covering 1960 97 we found strong support for the ppp doctrine as a useful guide for exchange rate policy reform in africa

consumer resistance and monopoly behavior under franchise contestability the probability of a deregulation under anti monopoly consumer lobby is generated at the cournot nash equilibrium of a lobbying game which depends on the monopoly rent and the deadweight loss this probability is increasing and convex in monopoly price when the deregulation probability constraint is binding the monopolist s price rises with the number of consumers the competitive price and the given ceiling probability the social cost of a monopoly under franchise contestability differs from the posner measure

capital flows real exchange rate misalignment and ppp tests in emerging market countries the economic performance of emerging markets has significant impacts on economic growth and volatility of macroeconomic indicators in various countries emerging markets accounted for 20 43 of global exports during the period 1970 2005 and held 70 of global foreign reserves in recent years more than 50 of the exports from the euro area japan and the united states go to emerging markets and other developing countries the globalization of capital flows is facilitated by technological innovations and excellent information networks coupled with sharp increases in savings that are directed into financial instruments across borders the use of purchasing power parity ppp as a benchmark in exchange rate policy reforms assumes the existence of a stable relationship between the exchange rate and the ratio of price levels in two countries this article investigates whether or not long run ppp holds in emerging markets johansen s cointegration technique is used with annual data in analysing the relationsh

rent seeking with asymmetric valuations this paper analyzes tullock s rent seeking game with asymmetric valuations for a variable range of the returns to scale parameter a necessary and sufficient condition for a unique pure strategy nash equilibrium is established equilibrium effort and expected profits are determined and subjected to comparative statics analysis increasing the underdog s valuation induces both players to increase their efforts increasing the favorite s valuation increases his effort but decreases the effort of the underdog expected profits increase with a player s valuation but decreases with the valuation of the competitor the impact of the returns to scale parameter is also analyzed

an empirical examination of long run purchasing power parity using cointegration techniques this paper presents an empirical analysis of long run purchasing power parity ppp for five major exchange rates using recently developed econometric techniques on the cointegration of economic time series our empirical results are extremely unfavourable to the ppp hypothesis as a long run equilibrium condition even with an allowance made for measurement error and or tranportation costs in particular we are unable to reject the hypothesis of non cointegration of the exchange rate and relative prices for any of the countries concerned far from finding a stable long run proportionality between exchange rates and relative prices our results therefore suggest that they tend to drift apart without bound

the role of investment in environmental lobbying contests this paper establishes that a lobbying stage following investment decisions regarding abatement technology may imply a positive strategic effect of investment pointing to relatively more investment in pollution abatement technologies than without lobbying the intuition is that polluting firms may choose to implement more advanced abatement technology as a credible commitment device in order to lower the investment of environmentalists in the lobbying contest that will ultimately determine whether or not an emissions tax is introduced