absence of any regulation, private investment decisions on capacity unambiguously lead to a socially sub-optimal outcome, and …

Regulation consists of rulemaking and enforcement. Economic theory offers two complementary rationales for regulating … arise in multi- party relationships and that regulation introduces opportunities to impose rules that enhance the welfare of … discretion and choose actions for the common good. Agency-cost theories portray regulation as a way to raise the quality of …

Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable ….4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation … changes in the direction of R&D, and find that regulation’s negative effects only matter for incremental innovation (as …

We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our …. With flexible wages, the deadweight loss of the regulation is below 1% of GDP, but when wages are downwardly rigid welfare … losses exceed 5%. We also show, regardless of wage flexibility, that the main losers from the regulation are workers (and to …