Imperfect durability and the Coase conjecture

This article considers a market served by a monopolist who sells a durable good that depreciates stochastically over time. We show that there exist three types of stationary equilibria: a Coase Conjecture equilibrium, a monopoly equilibrium, and a reputational equilibrium. When the depreciation rate is low, the Coase Conjecture equilibrium is the unique equilibrium. For intermediate values of the depreciation rate, all three equilibrium types coexist. When the depreciation rate is high, the monopoly equilibrium is the unique equilibrium. Consequently, when selling a good of sufficiently low durability, the monopolist does not lose any of her monopoly power. Furthermore, the steady‐state output in the reputational equilibrium falls below the monopoly quantity. Hence, in durable goods markets, welfare losses due to monopoly power may be larger than in markets for perishables.     

A Tale of Two Growth Engines: Interactive Effects of Monetary Policy and Intellectual Property Rights

How do intellectual property rights that determine the market power of firms influence the growth and welfare effects of monetary policy? To analyze this question, we develop a monetary hybrid endogenous growth model in which R&D and capital accumulation are both engines of long‐run economic growth. We find that monetary expansion hurts economic growth and social welfare by reducing R&D and capital accumulation. Furthermore, a larger market power of firms strengthens these growth and welfare effects of monetary policy through the R&D channel but weakens these effects through the capital‐accumulation channel. Therefore, whether the market power of firms amplifies or mitigates the welfare cost of inflation depends on the relative importance of the two growth engines. Finally, we calibrate the model using data in the United States and the Euro Area to quantitatively evaluate and compare the welfare cost of inflation in these two economies and find that the R&D channel dominates in both economies.     

Secondary markets with changing preferences

If consumer valuations change over time, then secondary‐market frictions may raise monopoly profits and cause durability to be distorted away from the cost‐minimizing level. A monopolist who favors such frictions overinvests in durability, but planned obsolescence instead may be preferred when market frictions exist but a monopolist wishes they did not. Evidence from the book market is presented.     

我国保险市场结构的福利分析

本文基于产业组织理论模型分析了保险业市场结构及其相应的福利影响。以社会福利最大化的情形作为基准,考察了寡头竞争市场结构下低、高价保险的产出以及相关的社会福利状况。研究结果表明,保险业寡头竞争的市场结构并没有实现社会福利最大化,政府应对低、高价保险采取不同的政策,以谋求最优产出配置。     

Monopoly with resale

We examine the intricacies associated with the design of revenue‐maximizing mechanisms for a monopolist who expects her buyers to resell. We consider two cases: resale to a third party who does not participate in the primary market and interbidder resale, where the winner resells to the losers. To influence the resale outcome, the monopolist must design an allocation rule and a disclosure policy that optimally fashion the beliefs of the participants in the secondary market. Our results show that the revenue‐maximizing mechanism may require a stochastic selling procedure and a disclosure policy richer than the simple announcement of the decision to sell to a particular buyer.     

新常态下中国货币政策的宏观经济效应研究 ——基于不同中介目标的实证检验

以中国2003-2020年的季度宏观经济数据为样本,通过构建时变系数向量自回归模型分析银行间同业拆借利率、M2、信贷规模、社会融资规模四项货币政策中介目标对实际产出、通货膨胀、房地产市场以及股票市场的动态影响效应.结果表明:同业拆借利率对产出的影响呈增强趋势,M2、信贷以及社会融资规模等数量型货币政策对产出的影响效应更显著;信贷与社会融资规模对通货膨胀的影响效应较显著;同业拆借利率对房地产市场的短期影响效应较大;M2、信贷与社会融资规模对房地产与股票市场的长期影响效应较大.     

The cost of market power in banking: Social welfare loss vs. cost inefficiency

This paper analyses the relationship between market power in the loan and deposit markets and efficiency in the EU-15 countries over 1993–2002. Results show the existence of a positive relationship between market power and cost X-efficiency, allowing rejection of the so-called quiet life hypothesis [Berger, A.N., Hannan, T.H., 1998. The efficiency cost of market power in the banking industry: A test of the ‘quiet life’ and related hypotheses. Review of Economics and Statistics 8 (3), 454–465]. The social welfare loss attributable to market power in 2002 represented 0.54% of the GDP of the EU-15. Results show that the welfare gains associated with a reduction of market power are greater than the loss of bank cost efficiency, showing the importance of economic policy measures aimed at removing the barriers to outside competition.     

Education and social mobility

This paper shows that the design of education policy involves a potential conflict between welfare and social mobility. We consider a setting in which social mobility is maximized under the least elitist public education system, whereas welfare maximization calls for the most elitist system. We show that when private education is available, the degree of elitism that maximizes social mobility increases, while the welfare-maximizing degree of elitism decreases. The ranking between the welfare- and mobility-maximizing degrees of elitism may even be reversed. Utilitarian welfare is always higher when private supplementary education is available, but social mobility may be reduced.     

Regulating financial conglomerates

We analyze the risk-taking incentives of a financial conglomerate that combines a bank and a non-bank financial intermediary. The conglomerate's risk-taking incentives depend on the level of market discipline it faces, which in turn is determined by the conglomerate's liability structure. We examine optimal capital regulation for standalone institutions, for integrated conglomerates and holding company conglomerates. We show that, when capital requirements are set optimally, capital arbitrage within holding company conglomerates can raise welfare by increasing market discipline. Because they have a single balance sheet, integrated conglomerates extend the reach of the deposit insurance safety net to their non-bank divisions. We show that the extra risk-taking that this effect causes may wipe out the diversification benefits within integrated conglomerates. We discuss the policy implications of these results.     

Implications of biased reporting: conservative and liberal accounting policies in oligopolies

We examine the effects of biased (conservative or liberal) reporting on product market competition. Cournot duopolists observe either firm-specific or industry-wide shocks and provide noisy reports subject to an exogenous mandated bias attributed to public policy. Given neutral prior beliefs, either a conservative bias or a liberal bias enhances overall reporting-system informativeness as measured by the reduction of uncertainty. Consistent with previously established effects in the information sharing literature regarding increases in informativeness, we show that expected industry profits and expected consumer surplus may gain or lose from bias, depending on whether the shocks are firm-specific or industry-wide and the degree of product competition. Expected social welfare, however, always increases in bias, irrespective of the source of uncertainty and product substitutability or complementarity. We next consider a setting where firms self-select whether to bias reports and characterize regions of potential conflict with a public policy that maximizes expected social welfare. Further results on the differential effects of conservative or liberal bias follow from relaxing the assumption of neutral prior beliefs.     

Optimal Insurance Policy Indemnity Schedules With Policyholders’ Limited Liability and Background Risk

This article makes two contributions to the insurance literature by studying optimal insurance policy indemnity schedules with policyholders’ limited liability and background risk. First, generalizing a prominent approach by Huberman, Mayers, and Smith (1983), it is shown that a welfare subsidy in the case of a ruinous loss may make the insurance premium “overly fair” for nonbankrupting losses and full insurance for this event becomes optimal. Second, introducing correlated background risk into this limited liability framework relativizes or even turns results by Doherty and Schlesinger (1983) as to the impact of background risk on optimal coverage into its opposite.     

货币政策与宏观审慎政策共同支持宏观经济稳定

货币政策是维持宏观经济稳定运行的重要政策工具,但2007—2009年国际金融危机表明,仅仅保持物价水平稳定,忽视金融风险,并不足以维持宏观经济稳定。近年来中国提出双支柱宏观政策框架以支持宏观经济稳定,这一创新具有重要的理论与现实意义。我们首先提出了双支柱宏观调控的框架,强调应该注重两类政策目标的协同与矛盾、政策传导渠道的相互交叉与影响、冲击类型与开放条件的差异等,从而保证双支柱宏观调控对宏观经济的稳定效应。接下来,我们建立了一个DSGE两国模型,作为分析双支柱宏观调控稳定宏观经济的案例研究。研究表明,第一,金融冲击下,货币政策有助于稳定宏观经济,且随着汇率制度从固定转向浮动,货币政策稳定宏观经济的效果会明显加强。第二,在货币政策的基础上,增加以跨境资本流入税为代表的宏观审慎政策工具,可以有效遏制金融市场的顺周期机制,进一步提高宏观经济的稳定性,从而验证了双支柱宏观调控的有效性。第三,双支柱宏观调控的有效性与汇率制度有关,当汇率灵活性水平较低时,双支柱宏观调控对宏观经济的稳定效果更好。     

金融中介效率对货币政策效果的影响——基于动态随机一般均衡模型的研究

本文运用新凯恩斯框架下的DSGE模型研究金融中介效率对货币政策效果的影响,研究结果表明:(1)无论是利率规则还是数量规则,金融中介效率的提高都会弱化货币政策对产出、消费和通货膨胀的影响;(2)在利率规则下,金融中介效率提高还会平滑劳动的波动,并最终减少社会福利损失,而在数量规则下,金融中介效率提高会放大货币政策冲击造成的劳动的波动,并最终放大社会福利损失。因此,货币政策的中介目标应当由货币供应量向利率转变。     

First-and second-best allocations under economic and environmental uncertainty

This paper uses a micro-founded DSGE model to compare second-best optimal environmental policy, and the resulting Ramsey allocation, to first-best allocation. The focus is on the source and size of uncertainty, and how this affects optimal choices and the comparison between second- and first-best. While higher economic volatility is bad for social welfare in all cases studied, the welfare effects of higher environmental volatility depend on its size and the effectiveness of public abatement policy. The Ramsey environmental tax is pro-cyclical when there is an economic shock, while it is counter-cyclical when there is an environmental shock.     

Strategic Price Discrimination in Compulsory Insurance Markets

This paper considers price discrimination when competing firms do not observe a customer’s type but only some other variable correlated to it. This is a typical situation in many insurance markets—such as motor insurance—where it is also often the case that insurance is compulsory. We characterise the equilibria and their welfare properties under various price regimes. We show that discrimination based on immutable characteristics such as gender is a dominant strategy, either when firms offer policies at a fixed price or when they charge according to some consumption variable that is correlated to costs. In the latter case, gender discrimination can be an outcome of strategic interaction alone in situations where it would not be adopted by a monopolist. Strategic price discrimination may also increase cross subsidies between types, contrary to expectations.JEL Classification No.: L13, G22     

Price Stability in Economies with Habit Persistence

This paper shows that the divine‐coincidence does not hold in a sticky price model with external habit if a time‐varying tax rate on labor income is not implemented to fully eliminate the time‐varying distortions associated with external habit and monopoly power in goods market. The required labor income tax rate is inversely related to the risk‐free real interest rate and the markup in the goods market, but it is proportional to the degree of external habit. Under this circumstance, the optimal monetary policy commands a countercyclical interest rate, having a perfect negative correlation with tax rate in the sticky price model with external habit. If a time‐invariant tax is the only fiscal instrument, then the degree of external habit entails a gap between the private marginal rate of substitution between consumption and labor and the social marginal rate of substitution, generating an endogenous trade‐off between the stabilization of welfare‐relevant output gap and inflation. Under this circumstance, price stability is not the optimal policy. The monetary policy authority should optimally try to undo the time‐varying distortions associated with external habit and monopoly power in goods market by deviating from price stability.     

Damaged durable goods

I analyze a durable‐goods monopolist's incentives to introduce a damaged good (a stripped‐down version of the original good) in an infinite‐horizon framework. The damaged good helps the monopolist to mitigate the Coasian time‐inconsistency problem. However, it may lead to a welfare reduction: low‐valuation buyers are induced to purchase the low‐quality damaged good early rather than buy the high‐quality original good later, and when the players are patient the surplus loss from quality reduction outweighs the gain from earlier consumptions. This welfare result contrasts with the previous literature based on a static framework.     

关于完善企业年金运行机制的研究

构建中国特色福利制度体系是实现"中国梦"的重要保障,需要国家福利、企业福利等各种福利形式合力发挥作用。我国老龄化程度的快速加深、经济增长阶段的转换、基本养老保险面临的收支压力、劳资关系的紧张等都对企业年金提出了巨大需求,但实践中发展并不理想。基于企业年金市场化性质的分析,本文认为与企业实力、税收优惠政策相比,运行机制是今后一个时期影响企业年金发展最重要的因素,应该成为制度政策的着力点。围绕完善企业年金运行机制,从充分发挥市场机制作用、合理定位政府角色、划清相关当事人的责任界限、加快配套制度的建立四个方面提出了若干具体建议。     

Incentive-Based Lending Capacity,Competition and Regulation in Banking

This paper studies moral hazard in banking due to delegated monitoring in an environment of aggregate risk and examines its implications for credit market equilibrium and regulation, in a model where banks are price competitors for loans and deposits. It provides a rationale for an incentive-based lending capacity positively linked to the bank's capital and profit margin, for an oligopolistic market structure wherever banks have market power, and for capital requirements. Social-welfare-maximizing capital requirements are lowered in recessions, are higher the more fragmented the banking sector, and are increased when anti-competitive measures are removed. In equilibrium banks earn excessive profits and credit may be rationed. Journal of Economic Literature Classification Numbers: D82, G28, L13.     

Implications of habit formation for optimal monetary policy

We study the implications for optimal monetary policy of introducing habit formation in consumption into a general equilibrium model with sticky prices. Habit formation affects the model's endogenous dynamics through its effects on both aggregate demand and households’ supply of output. We show that the objective of monetary policy consistent with welfare maximization includes output stabilization, as well as inflation and output gap stabilization. We find that the variance of output increases under optimal policy, even though it acquires a higher implicit weight in the welfare function. We also find that a simple interest rate rule nearly achieves the welfare-optimal allocation, regardless of the degree of habit formation. In this rule, the optimal responses to inflation and the lagged interest rate are both declining in the size of the habit, although super-inertial policies remain optimal.