Growing populations and economies have increased the public's awareness that the world's environmental resources are finite. The issues of global warming and the depletion of the ozone layer have given universal significance to what were once local and regional pollution problems. What is evident from Public Economics and the Environment in an Imperfect World is that Coasian negotiations fail to internalize the costs of environmental degradation, often calling for public intervention through the market mechanism. In its consideration of such issues the book includes contributions on assessment problems, institutional aspects, the need for coordination and efficiency, and distribution issues.

Health care arguably is the single most regulated industry in industrial countries, and possibly in newly industrialized and developing countries as well. But what exactly is being regulated, what are the instruments used, and what are the effects and side-effects of such regulation? Regulation of Health: Case Studies of Sweden and Switzerland seeks to resolve problems in answering these key questions regarding the health care sector in two countries - Sweden and Switzerland. The volume contains a series of studies that compare the regulation of health and health care in these two apparently very similar countries, in considerable detail. The contributing teams acquired a great deal of knowledge about health regulation in both countries; they also derived comparative predictions when regulation differs, using actual observations to check whether these predictions are borne out. These comparisons are based on the conditions prevailing in the mid-nineties.

A thorough analysis of insider trading requires the integration of law and finance, and this book presents a theoretical and empirical examination of insider trading by incorporating a synthesis of securities law with that of financial theory. The book begins with a conceptual framework that explores the theoretical roles of markets, firms and publicly held corporations, including a discussion of corporate governance to determine both who may have access to nonpublic information, and their legal rights and responsibilities. The book then examines different aspects of the securities laws, including the Securities Act of 1933, the Securities Exchange Act of 1934, and a critique of the SEC disclosure rules and their ramifications for market efficiency. This is followed by a detailed chronology of insider trading regulations enacted in the U.S. since 1934 and an overview of the existing empirical literature on insider trading. Empirical evidence is presented on insider trading activities and the merit of anti-insider trading laws is evaluated on theoretical arguments and recent empirical developments. The authors conclude by arguing that insider trading laws and enforcement activities have failed and propose the decriminalization of insider trading.

The Asian crisis of 1997-1998 was a major influence on macroeconomic thinking concerning exchange rate regimes, the functioning of international institutions, such as the IMF and the World Bank, and international contagion of macroeconomic instability from one country to another. Exchange Rate Regimes and Macroeconomic Stability offers perspectives on these issues from the viewpoints of two Nobel Laureates, an IMF economist, and Asian economists. This book contributes new ideas to the ongoing debate on the role of domestic monetary authorities and international institutions in reducing the likelihood of international financial crises, as well as the problems associated with various exchange rate regimes from the standpoint of macroeconomic stability. Overall, the chapters contained in this volume offer interesting perspectives, which have been stimulated by the recent events in the foreign exchange market. They provide a useful reference for anyone interested in the development of exchange rate regimes, and represent considerable reflection by economists half a century after Bretton Woods.

The Japanese population is aging faster than any other in the world. The per centage of Japan's population aged 65 and above was only 7.1% in 1970, but just 30 years later, in 2000, it reached 17.2%. A declining birth rate and a rising average life expectancy will continue to push this trend further. This situation is causing serious problems for Japanese society.Structural reforms, especially tax and social security reforms, to accommodate this drastic demographic change have become an urgent policy issue. The purpose of this book is to establish guidelines for tax and social security reforms in Japan in terms that are both efficient and equitable. In this study, an extended life-cycle general equilibrium model is employed to rigorously take account of the rapidly aging Japanese population. The simulation approach adopted in our analysis permits us to calculate the effects of alternative policy packages on capital accumulation and economic welfare. This enables us to make proposals for concrete economic policies."

Federalism has generally been characterized as a system of government that is friendly to liberty. It is not obvious, though, why this should be so. Federalism is a form of government where citizens simultaneously reside in at least two governments, each of which has independent authority to tax and to regulate. By contrast, in a unitary form of government citizens face only one government with independent authority to tax and regulate. At first glance, it would seem a bit strange to claim that liberty is more secure when citizens are members of two governments with independent authority than when they are members of only one such government. The relationship between federalism and liberty turns out to be a complex one, and one that is capable of working in either direction. Whether federalism supports or erodes liberty depends on importantly on the institutional framework within which federalist governance takes place. The essays in Federalist Government in Principle and Practice examine this institutionalist theme from both theoretical and practical perspectives.

I. Until about a dozen years ago, the economic analysis of the relationship between political preferences and political demands was a rather straightforward, if dull, subject. The most common assumption was that the only political instrument available to citizens was the vote. Given this assumption, the analyst could express the outcome of the voting process in one of two ways. One possibility was to make the heroic assumptions necessary to obtain the median voter theorem, in which case, the political demands of the citizenry are simply the preferences of the median voter. The alternative was to make Arrow's Impossibility Theorem in which case even though individual preferences are well ordered, no collective preference function exists. On either of these approaches, institutions such as interest groups, political parties, or the structures ofpolitical representation played no role in the analysis. The work of "Chicago" scholars especially George Stigler, Gary Becker and Sam Peltzman took a different approach and emphasized the importanceoforganizationinmakingpoliticaldemandseffective, shifting thefocus from voting topolitical "pressure" byinterestgroups. However, in these models, voting as an instrument of political action simply disappears and the relationship between interest group pressures and electoral processes has never been clarified.

The experience of privatization of social security has been predominantly in the Latin American region. Eight countries have undertaken either full or partial privatization of pensions: Argentina, Bolivia, Chile, Colombia, El Salvador, Mexico, Peru, and Uruguay. What did the policymakers expect? Were expectations realized? Can we learn anything from the collective experience of these countries? Can they be applied to other countries that are aspiring to privatize? How did the World Bank and other international institutions affect these policies? Pension Reform in Latin America and Its Lessons for International Policymakers analyzes in detail these important questions. The book begins with a detailed account of economic conditions in Latin America. It then discusses various models that policymakers rely on. Starting with a purely demographic model, it lays out advanced models of overlapping generations of Samuelson. The book gives extensive details of privatized pensions in each of the eight reforming countries. Two chapters are devoted to analyzing the reform in each country. Finally, detailed lessons are drawn that will help shape the debate for policymakers in other countries.

Organization, Performance and Equity: Perspectives on the Japanese Economy provides an analysis of key components of the Japanese economy and business structures, edited by two leading American-based Japan scholars. The contributions to this book are grouped into four major categories: organizations; income distributions; technological progress; and macro performance. The first section examines the retail sector, the role of information in evaluating distribution systems, and ownership structures and their effect on welfare, all in the context of the Japanese economy. The second section concerns issues of Japanese tax structures, growth, and income transfers, while the third section focuses on technology and productivity. The concluding section addresses major macro issues like trade and the value of the yen.

Globalization, Technological Change and Labor Markets is an edited collection of papers drawn from the conference held at the American Institute for Contemporary German Studies in June 1997. This conference brought German and American perspectives to bear on the complex issues of global competition, technological change, and labor markets in the welfare state. The contributions are organized into five sections dealing with various aspects of the problem: (1) Macroeconomic Perspectives; (2) Microeconomic Aspects; (3) the German Model of Labor Relations; (4) the Social Market Economy; and (5) Trade Policy and Environmental and Labor Standards. This edited collection seeks to explore many of the key issues surrounding the debate over the impact of globalization and technological change on labor markets in Europe and the United States. `This volume provides path-breaking insights as to why globalization has wreaked havoc on the welfare states that had once propelled Western Europe and North America to an unprecedented standard of living throughout the post-war period. The high level of scholarship contained in the individual chapters forms a compelling argument that will convince even the most resistant skeptics that the days of the classic welfare state are numbered. More importantly, this book is filled with concrete suggestions based on careful economic analysis as to how technological change and globalization can be harnessed in conjunction with a new role of the state to provide a high standard of living.' David B. Audretsch, Ameritech Chair of Economic Development, Indiana University

This book is based on a conference on 'Regulation and the Evolving Nature of Postal and Delivery Services: 1992 and Beyond' held at Village PTT, La Londe les Maures, France, on March 18, 1992. Leading practitioners, worldwide postal administrations, and the express delivery industry, as well as a number of regulators, academic economists, and lawyers examine the important policy and regulatory issues facing the postal and delivery industries. This includes such issues as: international postal policy and the role of the Universal Postal Union; regulation and terminal dues; competition, entry and the role of scale and scope economies; the nature and role of costs analysis in postal service; productivity; and service standards.

This book brings together much of the best policy-oriented research on state and local mortgage revenue bond (MRB) programs. Most of this re search was conducted to evaluate the impact of MRB subsidies on housing markets and potential home buyers. All of the research is concerned with the "so what" question often ignored by economists: it addresses the implications of the research results for public policy decisions concerning MRBs. The need for this book becomes apparent when reading the transcripts of congressional hearings on MRBs. At those hearings, the policy debate seems underinformed. Aside from discussions of the General Accounting Office's periodic evaluations of MRB programs and impassioned rebuttals by MRB proponents, the hearing testimony consists mostly of assertions and anecdotal evidence, with some "yes MRBs work" and "no they don't" exchanges. Although the research in this book may not improve the level of the policy debate on MRBs, it can inform decision makers, experts, and citizens interested in housing policy about issues that should be examined when considering the future of MRBs. Also, it can point other researchers interested in housing policy in the direction of the questions about MRB programs that need additional attention."

Global Competition and Integration offers varied perspectives on the changing international economy. The book is divided into four main sections covering world trade and competition, innovation and growth, financial markets and globalization, and regulation, distribution, and the role of government.

Contemporary Issues in Accounting Regulation looks at accounting regulation in a different way. The opening chapters explore the tension between the power of the state and the forces of the market, and other aspects of the political dimension to accounting regulation. The book also examines the process of setting accounting standards, highlighting the crucial role of standard setters in assessing the level of public support for an issue in the face of opposing positions taken by powerful interest groups. In addition, the book provides an introduction to the theoretical framework of accounting regulation, looking at choices between controversial accounting methods and at markets that are characterized by asymmetry of information and beliefs. The final chapters of the book are concerned with creative accounting, deregulation of financial reporting by smaller companies, and the link between price regulation and accounting policy choices.

In the future, as our society becomes older and older, an increasing number of people will be confronted with Alzheimer's disease. Some will suffer from the illness themselves, others will see parents, relatives, their spouse or a close friend afflicted by it. Even now, the psychological and financial burden caused by Alzheimer's disease is substantial, most of it borne by the patient and her family. Improving the situation for the patients and their caregivers presents a challenge for societies and decision makers. Our work contributes to improving the in decision making situation con cerning Alzheimer's disease. At a fundamental level, it addresses methodo logical aspects of the contingent valuation method and gives a holistic view of applying the contingent valuation method for use in policy. We show all stages of a contingent valuation study beginning with the design, the choice of elicitation techniques and estimation methods for willingness-to-pay, the use of the results in a cost-benefit analysis, and finally, the policy implica tions resulting from our findings. We do this by evaluating three possible programs dealing with Alzheimer's disease. The intended audience of this book are health economists interested in methodological problems of contin gent valuation studies, people involved in health care decision making, plan ning, and priority setting, as well as people interested in Alzheimer's disease. We would like to thank the many people and institutions who have pro vided their help with this project.

Equal treatment in access to credit has long been a fundamental social goal in the United States. However, despite the passage of several laws in the U.S. prohibiting discrimination in the provision of financial services on the basis of race, gender, and marital status, among other factors, questions concerning the existence of racial discrimination in such areas as home mortgage loans and small business credit continue, and confound public policy makers. This book is composed of nine articles and a panel discussion, originally published as a special issue of the Journal of Financial Services Research. These contributions explore the complex issue of discrimination in financial services.

The dramatic growth of international capital flow has provided unprecedented opportunities and risks in emerging markets. This book is the result of a conference exploring this phenomenon, sponsored by the Federal Reserve Bank of Dallas. The issues explored include direct versus portfolio investment; exchange rates and economic growth; and optimal exchange rate policy for stabilizing inflation in developing countries. It concludes with a panel discussion on central bank coordination in the midst of exchange rate instability.

Deterrence of market manipulation is central to the entire regulatory and legal framework governing the operation of American commodity futures markets. However, despite all of the regulatory, scholarly, and legal scrutiny of market manipulation, the subject is widely misunderstood. Federal commodity and securities laws prohibit manipulation, but do not define it. Scholarly research has failed to analyze adequately the causes or effects of manipulation, and the relevant judicial decisions are confused, confusing, and contradictory. The aim of this book is to illuminate the process of market manipulation by presenting a rigorous economic analysis of this phenomenon, including the conditions that facilitate it and its effects on market users and others. The conclusions of this analysis are used to examine critically some legal and regulatory anti-manipulation policies. The Economics, Law and Public Policy of Market Power Manipulation concludes with a set of robust and realistic tests that regulators and jurists can apply to detect and deter manipulation.

The worldwide deployment of wind power plants is soaring. Yet the availability of their construction materials could be a potential bottleneck. As rare earth elements represent the most critical materials, Anja Brumme provides a market analysis of rare earths, ascertaining that geological scarcity is not the main problem. Instead, the author identifies four kinds of market failure: market power, co-production, by-production and negative externalities. It becomes apparent that the market for rare earth metals is in a state of severe disequilibrium. Subsequently, her estimate of future rare earth demand patterns based on the wind power industry by 2050 reveals that the current level of supply is unlikely to be sufficient in the long run. To allow for a more elaborate analysis, the author suggests two options of including a rare earth side condition in an integrated assessment model.

Amartya Sen "Equality," I spoke the word As if a wedding vow Ah, but I was so much older then, I am younger than that now. Thus sang Bob Dylan in 1964. Approbation of equality varies not only with our age (though it is not absolutely clear in which direction the values may shift over one's life time), but also with the spirit of the times. The 1960s were good years for singing in praise of equality. The spirit of the present times would probably be better reflected by melodies in admiration of the Federal Reserve System. And yet the technical literature on the evaluation and measurement of economic inequality has grown remarkably over the last three decades. Even as actual economic policies (especially in North America and Europe) have tended to move towards focusing on virtues other than the avoidance of economic inequality, the professional literature on assessing and gauging economic inequality has taken quite a jump forward. A great many different problems have been addressed and effectively sorted out, and new problems continue to be posed and analyzed. The Contents: A Review Jacques Silber has done a great service to the subject by producing this collection of admirablyhelpful and illuminating papers on different aspects of the measurement of income inequality. The reach of this collection is quite remarkable. Along with a thorough overview from the editor himself, the major areas in this complex field have been carefully examined and accessibly discussed.

Foreign aid has been an area of active scholarly investigation since the end of the Second World War, but particularly since the early 1950s when a large number of the erstwhile colonies became independent. Few areas of public policy involving the developed and developing countries have aroused more passion and ideological debate than foreign aid. In spite of the massive amount of research in the field, there is still not enough work in two areas: the first involves the mechanisms through which aid influences the economies of the donor and the recipient countries; and the second, country-specific assessments of the effectiveness of foreign aid. Foreign Aid: New Perspectives is aimed at making a contribution in these two areas. The contents of this volume are divided into four parts. Part I deals with some theoretical aspects of foreign aid, while the second part analyzes some general policy aspects. Part III turns to the donor experience and includes one paper on the Danish experience. The last part considers the recipient experience and consists of five case studies.

The Post-Uruguay Round era has seen a proliferation of regional preferential trade agreements (PTAs) as well as progressive multilateral trade liberalization initiatives. This has stimulated theoretical discussion on whether the policy of pursuing PTAs will have a malign or a benign impact on multilateralism. In the former case, proliferation of PT As may increase protection in global trade due to trade diversion effects, thereby creating impediments to multilateral freeing of global trade. In the latter case, the expansion of PTA membership could ultimately lead to non-discriminatory global free trade. At the core of this discussion is the question of how to explain the preference for PTA membership. While some economists view the expansion of PTA membership as exogenously determined, participants of the Fourth Annual Workshop of the Network EU-LDC Trade and Capital Relations also considered endogenous factors explaining increased PTA membership. This book offers a closer look at the motives of policy makers in both developed and developing countries to still adhere to PTAs, notwithstanding the theoretical superiority of multilateralism, and addresses the question of how to bring order into the world trading system. These issues are dealt with in 9 chapters by scholars from both the EU and LDCs. Each paper is discussed in terms of its policy relevance by a policy maker as well as by an academic specialized in the field.

The Impact of Public Policy on Consumer Credit presents a collection of research papers and discussions commissioned to commemorate the silver anniversary of Georgetown University's Credit Research Center in 1999. Nine topics serve as focal points for the volume, with the general theme 'What do we know, what do we need to know?' about the functioning of consumer credit markets at the beginning of the 21st century. Because the growth of household debt and the consequences of household debt burden have dominated discussion in both the media and policy arenas for decades, 'Credit Growth and the Burden of Debt' is the theme for the first group of three papers. The papers address the cultural evolution of consumer credit in the U.S., the rise in consumer indebtedness and the alarming surge in personal bankruptcies.A second grouping of three papers takes a distinctly policy-oriented tack and examines questions regarding consumer access to credit (mortgage markets and evidence of discrimination), consumer protection through mandatory disclosure of information (Truth-in-Lending regulations), and the general state of financial literacy among the population of young consumers entering credit markets for the first time. The final three papers in this volume examine how technological innovations in risk management (through statistical risk scoring models), marketing (through use of personal information for targeted marketing) and finance (through securitization of consumer loans) have impacted the availability of credit products and sparked new public policy questions.

Security concerns, the AIDS epidemic, environmental degradation, and financial contagion are salient features of today's landscape of threats to global stability. A characteristic of these challenges is that they cannot be solved by individual nations acting alone. Enlightened cooperation is needed. This book focuses on actions in the international arena to complement domestic efforts in addressing a set of policy challenges that has become more prominent in the age of globalization. It focuses on the strategic and practical challenges of fostering solutions that have the character of international public goods, paying particular attention to the financing of these goods.

International Finance and Financial Crises: Essays in Honor of Robert P. Flood, Jr. contains the proceedings of a conference held in honor of Robert P. Flood, Jr. Bob Flood has made important contributions to many areas of economic analysis, including regime switching, speculative attacks, bubbles, stock market volatility, macro models with nominal rigidities, dual exchange rates, target zones, and rules versus discretion in monetary policy. Contributors were invited to address any of the topics or others of their choosing. The results include five papers on topics in international finance; two of these papers, as well as the panel discussion, focus on speculative attacks and financial crises. The other three take new directions in exploring topics in which existing models leave much to be desired.