PRICING IN PUBLIC ENTERPRISES

The pricing in private and public enterprise differs primarily on the supply side. In the long run, private enterprises must cover total costs and provide an adequate return necessary to attract venture capital. In contrast, extra-commercial considerations may influence pricing in public enterprises. They may incur losses in the public interest under explicit directives from the government. A number of theories of pricing in public enterprises have been put forward. Most important of these are: (1) marginal cost of production theory; (2) no profit, no loss theory; (3) average cost of production theory; (4) theory of making profits. All these theories suffer from a number of weaknesses and none of them taken individually is a satisfactory guide for determining the prices of the products of public enterprises. There however exists a strong case for public enterprises, particularly in developing countries, to earn reasonable profits in pricing their products. Public enterprises fostered on public revenues must yield surpluses which can be used either for their own expansion or for financing the general development plans of the country. The profits which a public enterprise can earn are an important indication of the justification for the use of economic resources in that economic activity. Upholding the test of profit not only lessens possibilities of the investment decisions being subjected to political pressures but also safeguards against inefficiency in management. A policy of profits is essential for attaining the goal of building a socialist society. The amount of profits expected from different enterprises, however, cannot be uniform because of diverse objectives sought in the setting up of public enterprises, degree of essentiality of their products, nature of the services provided by them, size of their market, class of their consumers and their paying capacity, conditions of market under which they operate, their role in stimulating growth and social benefits conferred by them.     

TALKING,SEARCHING, AND PRICING*

I study the implications of interpersonal communication for incentives for consumers to acquire information and firms’ pricing behavior. Firms market a homogeneous product and choose its price; consumers acquire price information at some cost to themselves. Also, each consumer accesses the information acquired by a sample of other consumers—interpersonal communication. An exogenous increase in the level of interpersonal communication decreases the information that consumers acquire, and, when search costs are low, firms price less aggressively. In an extension, consumers may choose to invest in interpersonal communication at some cost. A decrease in the costs of interpersonal communication decreases firms’ competition.     

STATE DEPENDENT PRICING AND BUSINESS CYCLE ASYMMETRIES*

We present a tractable, dynamic general equilibrium model of state‐dependent pricing and study the response of output and prices to monetary policy shocks. We find important nonlinearities in these responses. For empirically relevant shocks, this generates substantially different predictions from time‐dependent pricing. We also find a distinct asymmetry with state‐dependent pricing: Prices respond more to positive shocks than they do to negative shocks. This is due to a strategic linkage between firms in the incentive for price adjustment. Our state‐dependent model can account for business cycle asymmetries in output of the magnitude found in empirical studies.     

COMPETITIVE PRICING AND EFFICIENCY IN SEARCH EQUILIBRIUM*

We consolidate and generalize some results on price determination and efficiency in search equilibrium. Extending models by Rubinstein and Wolinsky and by Gale, heterogeneous buyers and sellers meet according to a general matching technology and prices are determined by a general bargaining condition. When the discount rate r and search costs converge to 0, we show that prices in all exchanges are the same and equal the competitive, market clearing, price. Given positive search costs, efficiency obtains iff bargaining satisfies Hosios' condition and r=0. When prices are set by third‐party market makers, however, we show that search equilibrium is necessarily efficient.     

PUBLIC FINANCE AND REGIONAL ACCOUNTS*

This paper discusses the problems that arise in the regional allocation of public sector accounts. These problems arise mainly in connection with the regional allocation of government expenditures on a governing rather than a procurement basis, and in the derivation of a meaningful surplus or deficit. The latter in turn requires an examination of the real geographic incidence of government revenues—to avoid, for instance, the assignment of the whole tobacco tax to Virginia and North Carolina. The use of a procurement basis for government product and the real geographic distribution of direct tax incidence for government revenue would produce a more complete and meaningful regional surplus or deficit measure, and gross regional products will not be as subject to spurious inter-regional variation.     

PUBLIC ENTERPRISES AND LABOR MARKET PERFORMANCE*

This article shows that state control of some industries may have contributed to the increase in European unemployment from the 1970s to the early 1990s. We develop a simple two‐sector model, one privately run and one publicly run, that has risk‐averse workers directing their search into one of the sectors. Assuming that the privately run sector is less able to insure its employees against uncertainty, we show that aggregate unemployment in this economy increases in response to an increase in economic turbulence.     

SOCIAL ACCOUNTING AND THE PUBLIC SECTOR*

This article contributes to the theory of social accounting. As such, it tries to extend earlier literature on the welfare equivalence of the comprehensive net national product in two main directions, both of which refer to the public sector. One is by considering welfare measurement problems associated with public good provision and redistributive policy, respectively, when the public revenues are raised by distortionary taxes. The other is by addressing the consequences of a “federation‐like” decision structure, where independent tax and expenditure decisions are made both by the central government and by lower level governments.     

GOVERNMENT‐MANDATED DISCRIMINATORY POLICIES: THEORY AND EVIDENCE*

We study an economy with private and public sectors in which workers invest in imperfectly observable skills that are important to the private sector but not to the public sector. Government regulation allows native majority workers to be employed in the public sector with positive probability while excluding the minority from it. We show that even when the public sector offers the highest wage rate, it is still possible that the discriminated group is, on average, economically more successful. The widening Chinese/Malay wage gap in Malaysia since the adoption of its New Economic Policy in 1970 supports our model.     

中国应对突发公共卫生事件财税政策的对比研究

本文从国家治理体系和治理能力现代化的研究视角出发,利用政策工具分析法对比了非典与新冠肺炎疫情期间中国的财税政策,通过互联网检索财税政策关键词构建三级指标样本库考察财税政策的重视度、共振性和大数据应用情况。研究发现,较非典而言,新冠肺炎疫情的财税政策有如下变化:(1)财税部门出台政策文件的总体频率更高,政策发布频率与疫情变化态势同步性更强,政策内容更具有阶段性和针对性;(2)财税与其他政府部门之间、不同层级财税机关之间的协作共治程度增强;(3)财税部门运用大数据手段辅助高效决策和精准施策的能力提升。我国应对突发公共卫生事件的财税政策正稳步优化并成为国家治理现代化进程中不可或缺的"助推器"。     

INTERSTATE BANKING AND ANTITRUST LAWS: HISTORY OF PUBLIC POLICIES TO PROMOTE BANKING COMPETITION

Over the past several years, antitrust laws' significance as a public policy to promote competition in banking has diminished. Deregulation has intensified competition so much that it has made antitrust laws nonbinding constraints, even during a merger movement of extraordinary proportions. Deregulation and attenuating antitrust raise a question as to whether a distinctive competitive policy for commercial banks should exist as it has in the past.
Two earlier policies are identified and reviewed in this paper: (1) free banking, which in several forms existed from the 1830s to the early 1930s, and (2) antitrust, which became relevant during the early 1960s. Experience under both policies illuminates the interaction between competition and regulation in banking. Such experience indicates that the effects of current competitive policy must be evaluated within the developing regulatory environment. Partially evaluating current policy within this context suggests that new charter requirements should be reformulated and that large bank mergers should be limited. So long as a distinctive regulatory system exists, a distinctive competitive policy for banks is needed.     

ECONOMIES WITH PUBLIC PROJECTS: EFFICIENCY AND DECENTRALIZATION*

The article deals with the two fundamental theorems of welfare economics for production economies with a finite set of agents, infinitely many private goods, and a set of public projects. The problem of efficiency and decentralization is addressed under the following very general assumptions: (a) the commodity–price duality is endowed with a consistent locally convex topology; (b) the set of public projects is without any mathematical structure. Moreover, any agent is characterized by a nonordered preference relation depending on consumption goods and public projects. Approximate and exact welfare theorems are discussed throughout the article.