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Price Regulation, Investment and the Commitment Problem

Levine, Paul L; Rickman, Neil - C.E.P.R. Discussion Papers - 2002

We consider a dynamic model of price regulation with asymmetric information where strategic delegation is available to the regulator. Firms can sink non- contractible, cost-reducing investment but regulators cannot commit to future price levels. We fully characterize the Perfect Bayesian...

Persistent link: https://www.econbiz.de/10005124103

Shocks and the Viability of a Fixed Exchange Rate Commitment

Andersen, Torben M - C.E.P.R. Discussion Papers - 1994

The incentive to renege on a commitment to a fixed exchange rate is shown to be state contingent. A fixed exchange rate … policy is not viable under `unusual' circumstances, and the incentive to violate the commitment is larger in the case of …

Persistent link: https://www.econbiz.de/10005124373

Sovereign Risk and Secondary Markets

Broner, Fernando A; Martin, Alberto; Ventura, Jaume - C.E.P.R. Discussion Papers - 2007

Conventional wisdom says that, in the absence of sufficient default penalties, sovereign risk constraints credit and lowers welfare. We show that this conventional wisdom rests on one implicit assumption: that assets cannot be retraded in secondary markets. Once this assumption is relaxed, there...

Persistent link: https://www.econbiz.de/10005136448

Policy Choice: Theory and Evidence from Commitment via International Trade Agreements

Limão, Nuno; Tovar, Patricia - C.E.P.R. Discussion Papers - 2009

Why do governments employ inefficient policies to redistribute income towards special interest groups (SIGs) when more efficient ones are available? To address this puzzle we derive and test predictions for a set of policies where detailed data is available and an efficiency ranking is feasible:...

Persistent link: https://www.econbiz.de/10005136624

Monetary and Fiscal Policy Interaction with Various Degrees and Types of Commitment

Hughes Hallett, Andrew; Libich, Jan; Stehlík, Petr - C.E.P.R. Discussion Papers - 2007

asynchronous game framework that generalises the standard commitment analysis. It allows concurrent and partial commitment; both … outcomes can be prevented if monetary commitment is sufficiently strong relative to fiscal commitment. Interestingly, monetary … commitment can not only resist fiscal pressure, but also discipline an ambitious fiscal policy maker to achieve socially …

Persistent link: https://www.econbiz.de/10005067413

Competition, Regulation and Managerial Incentives

De Fraja, Gianni; Iossa, Elisabetta - C.E.P.R. Discussion Papers - 1994

This paper examines the effects of a competitive fringe on a regulated firm. Using Hart's (1983) model, we show that competition weakens the managerial incentives for cost reduction: when there is correlation between the cost levels of the firms in the industry, costs are higher in the regulated...

Persistent link: https://www.econbiz.de/10005067523

Entry, Pricing and Incentives: The Role of Regulatory Commitment

De Fraja, Gianni - C.E.P.R. Discussion Papers - 1994

reduction depends on the extent of the regulator's commitment: if it is possible to commit to the chosen policy, then the market …

Persistent link: https://www.econbiz.de/10005067561

A Positive Theory of Social Security

Tabellini, Guido - C.E.P.R. Discussion Papers - 1990

model in which all individuals currently alive vote on social security. There is no commitment to preserve the legislation …

Persistent link: https://www.econbiz.de/10005497728

Signalling and Commitment: Monetary versus Inflation Targeting

Gersbach, Hans; Hahn, Volker - C.E.P.R. Discussion Papers - 2003

This Paper compares the social efficiency of monetary targeting and inflation targeting when central banks may have private information on shocks to money demand and, because of verifiability problems, the transparency solution is not feasible. Under inflation targeting and monetary targeting,...

Persistent link: https://www.econbiz.de/10005497735

Choosing the Width of Exchange Rate Bands - Credibility vs. Flexibility

Cukierman, Alex; Leiderman, Leonardo; Spiegel, Yossi - C.E.P.R. Discussion Papers - 1994

optimal band width widens in response to a decrease in policy-makers' commitment reputation, an increase in the cost of …

Persistent link: https://www.econbiz.de/10005497847