We examine a setting in which property rights are initially ambiguously defined. Whether the parties go to court to remove the ambiguity or bargain and settle privately, they incur enforcement costs. When the parties bargain, a version of the Coase theorem holds. Despite the additional costs of...

This paper examines the macroeconomic welfare effects of interest risk premia and controls that limit international capital mobility. Using extended loanable funds analysis, it first demonstrates how perfect capital mobility maximises national income, contrary to a prevalent view that it is...

When there are three parties, it is well known that the Coase Theorem may not hold even when there are no transaction costs, due to the emptiness of the core of the corresponding cooperative game [Aivazian and Callen (1981)]. We show that the standard Coasean bargaining game involving three...

type="main" xml:id="ecpa12066-abs-0001" <p>It is well known that when there are existing distortions in related markets, partial equilibrium estimates of the welfare costs of new distortions using the standard “Harberger triangle” may be misleading (Goulder & Williams, [Goulder, L., 2003]). We...</p>

Three major policy tools govern the demand for private health insurance (PHI) in Australia: premium-related subsidies (i.e. PHI-rebate); income tax surcharges (i.e. the Medicare Levy Surcharge (MLS)); and lifetime community-rating (i.e. Lifetime Health Cover). The first two provide a system of...

Australia's carbon tax has been in place since July 2012. Following the 2013 federal election and change of government, it is likely that the tax will be abolished. This paper evaluates Australia's carbon tax experience and draws lessons for policymakers in other jurisdictions who may be...