Environmental Taxation and Vertical Cournot Oligopolies: How Eco-industries Matter

This article specifies what an optimal pollution tax should be when dealing with a vertical Cournot oligopoly. Polluting firms sell final goods to consumers and outsource their abatement activities to an environment industry. It is assumed that both markets are imperfectly competitive. Thus, the tax is a single instrument used to regulate three sorts of distortions, one negative externality and two restrictions in production. Consequently, the optimal tax rate is the result of a trade-off that depends on the firms’ market power along the vertical structure. A detailed analysis of Cournot-Nash equilibria in both markets is also performed. In this context, the efficiency of abatement activities plays a key-role. It gives a new understanding to the necessary conditions for the emergence of an eco-industrial sector.      

Competition Policy: What are the Costs and Benefits of Measuring its Costs and Benefits?

Summary  Competition authorities are increasingly measuring the effects of their enforcement actions, seeking a robust justification for the proliferation of competition policy. We highlight the importance of identifying the right counterfactual against which to measure effects, and set out the relevant categories of costs and benefits. We then explore how a balance can be struck between the benefits and inherent limitations of these measurement exercises. Relatively crude analyses of cartel action benefits can be sufficient to achieve public legitimacy for competition policy. Assessing the effects of merger and conduct inquiries is often ambiguous, but could be used to improve decision-making processes. Director and Managing Consultant, respectively, at Oxera, Oxford and London. The valuable comments of Fod Barnes, Kerry Hughes and an anonymous referee are gratefully acknowledged. The opinions expressed in this article are those of the authors alone.     

Determinants of Current Account Imbalances in 16 OECD Countries: An Out-Of-Sample Perspective

We employ panel data as well as country-specific models to uncover empirically the determinants of current account imbalances. We find evidence of slope heterogeneity likely rendering the fixed-effect estimator inconsistent. Mean group estimation is followed to overcome the latter difficulty. Both estimation techniques are evaluated by means of in- and out-of-sample criteria. The mean group estimator outperforms the fixed-effect approach and, moreover, only three economic variables are found to impact on the current account balance significantly. These are the government budget balance, the domestic output gap and the changes of the terms of trade. We finally propose a parsimonious dynamic model of the current account, including only these variables and illustrate that it has similar predictive accuracy as country-specific benchmark models. JEL no. F32, C23, C53     

Tourism as an alternative source of regional growth in Portugal: a panel data analysis at NUTS II and III levels

The role of tourism is of vital economic importance, particularly for small countries with a privileged geographical location and favourable weather conditions. This paper examines the importance of tourism as a conditioning factor for higher regional growth in Portugal by employing the conditional convergence hypothesis of Barro and Sala-i-Martin, associated with the endogenous growth theory. The panel data estimation approach provides evidence of the positive impact of tourism (through the accommodation capacity) on the growth in per-capita income among the Portuguese regions, increasing the rate of convergence. Therefore, tourism can be considered as an alternative source for stimulating higher regional growth in Portugal, if the supply characteristics of this sector are improved.     

A market model of analysts’ opinions to explain changes in the dispersion of opinions

The demand for and supply of analysts’ opinions in this model yield an equilibrium that demonstrates how the information content of the opinions reacts to changes in exogenous parameters. The model also shows how changes in the parameters make analysts’ opinions more or less dispersed; for example, a decline in investor risk aversion, a decrease in market volatility, and an increase in information costs can lead to analysts’ opinions becoming more similar. Recognizing how exogenous factors can affect the supply and demand of analysts’ opinions gives additional insights into questions concerning what may appear to be herd behavior by analysts and also the relationship between forecast dispersion and information content. (JEL: G29, C71)     

EFFECT OF FED POLICY ACTIONS ON THE DEFAULT LIKELIHOOD OF COMMERCIAL BANKS

Using a measure of default likelihood based on an option pricing method, we provide evidence that Fed policy actions affect the financial distress of commercial banks. When the Fed increases (decreases) interest rates, the measure of default likelihood increases (decreases). We show that when the Fed uses a tight money policy, the increase in default likelihood is more pronounced for banks that have less capital, have greater financial leverage, are smaller, have fewer growth opportunities, and have lower asset quality. Additionally, the effects on bank default likelihood are more pronounced when the Fed's policy signals less concern about economic growth, as indicated by its bias toward further tightening, and when there is a market expectation of higher short‐term market rates in the future.     

Immobiliencontrolling — Optimierung der immobilienbezogenen Kosten durch Gründung einer Generalmietgesellschaft

Ohne Zusammenfassung Dipl.-Ing. (univ.) Michael Belau ist Director und Head of Rental Management Dipl.-Wirtschaftsing. (FH) Michael Schildger ist Vice President und Head of Finance Dr. Verena Sturm ist Manager Corporate Real Estate Services