New Trends in U.S. Industrial Concentration

Using weighted concentration ratios for the entire economy, I argue that industrial concentration decreased in the U.S. from 1960 to the early1980s and then began to increase. This rise in the last two decades of the 20th century offsets any counteracting affectsstemming from the growth of use of information technology in production or from imports and appears due primarily to the impact of the merger wave starting in the mid 1980s. I also considerbriefly the relationship between increasing market concentrationand a change in market competition,taking into account the expansion of e-commerce.     

Big Data,Official Statistics and Some Initiatives by the Australian Bureau of Statistics

Official statisticians have been dealing with a diversity of data sources for decades. However, new sources of data in the Big Data domain provide an opportunity to deliver a more efficient and effective statistical service. This paper outlines a number of considerations for the official statistician when deciding whether to embrace a particular new data source in the regular production of official statistics. The principal considerations are relevance, business benefit, and the validity of using the source for official statistics in finite population inferences or analytic inferences. The paper also describes the Big Data Flagship Project of the Australian Bureau of Statistics (ABS), which has been established to provide the opportunity for the ABS to gain practical experience in assessing the business, statistical, technical, computational and other issues in using Big Data. In addition, ABS participation in national and international activities in this area will help it share experience and knowledge, while collaboration with academics will enable ABS to better acquire the capability to address business problems using the new sources of data as part of the solution.     

Tourism knowledge and neocolonialism – a systematic critical review of the literature

Despite the official end of colonialism in the twentieth century, neocolonial structures of power have kept influencing the political, socio-cultural and economic arenas worldwide. Within this scenario, the tourism academy has seen its landscape develop with its own set of power structures, which have shaped its knowledge production and dissemination. However, whether and how neocolonial forces have exerted their influence on tourism knowledge production and dissemination is still a subject of debate among scholars. This paper was conceived as an attempt to cast additional light on the nexus between tourism knowledge and neocolonialism. More specifically, through a systematic review of the articles published in tourism journals in the last decade (2007–2017), this work assesses the status of the current tourism knowledge through the lens of neocolonialist theory. Overall, this critical review highlights that with some exceptions, most of the previous reviews concerning tourism knowledge only evaluate the work published in English in highly ranked tourism journals and tend to neglect knowledge systems outside the English-speaking global centres. Furthermore, previous studies exploring structures of power affecting tourism knowledge production and dissemination present limitations in terms of the themes and perspectives identified.     

The Squam Lake Report: Fixing the Financial System*

In these excerpts from The Squam Lake Report, fifteen distinguished economists analyze where the global financial system failed, and how such failures might be prevented (or at least their damage better contained) in the future. Although there were many contributing factors to the crisis—including “agency” problems throughout the financial system and a bankruptcy code poorly suited for reorganizing financial firms—at the core of the problem is a potential conflict between the risk-taking proclivity of financial institutions and the interests of the economy at large that must be managed at least in part through more effective regulation. The Squam Lake Report provides a nonpartisan plan to transform the regulation of financial markets in ways designed to limit systemic risk while preserving—to the extent possible and prudent—the economies of scale and scope that justify the existence of today's large financial institutions. To reduce the risks that large banks will fail, the authors call for higher capital requirements based on more effective assessments of the risks of bank assets and liabilities, as well as a new systemic regulator that should be part of the central bank. To reduce the costs of failure when it occurs, the authors propose that banks be required to create “living wills” laying out their plan to sell assets or shut down operations in the event of financial trouble. As part of that plan, regulators are urged to “aggressively encourage” banks to issue “contingent” debt capital securities that convert into equity.     

Bond risk premiums and optimal monetary policy

The bond yield dynamics implied by a welfare-maximizing monetary policy and its credibility are explored in general equilibrium. Credibility is captured by a regime change from discretion to commitment. The policy determines the optimal output and inflation responses to a source of inflation risk. Bond yields contain compensations for this risk that depend on the policy. Credibility improvements reduce the exposure to inflation risk and bond risk premiums decline. A model calibration implies lower yield spreads, less volatile yields, and reduced deviations from the expectations hypothesis under commitment. The model suggests an explanation for changes in yield dynamics in the U.S. across different policy regimes.     

Withholding investments in energy only markets: can contracts make a difference?

Although there are mechanisms to control market power in the spot market, withholding investments can still increase profits and hamper adequate capacity expansion. We examine the effect on investment of one suggested approach to reducing market power, contracting longer term. We construct a stylized model of an energy-only market where two firms, each specializing in one technology, invest in a first stage, contract part of their production in the second stage and sell the rest in the spot market in the third stage. We compare this model to one of an energy-only market having two stages, investment and a spot market. We find cases where the contracts change neither capacity nor peak prices, where the foreclosing effect of one player blocking the other from contracts markets increases investments and reduces prices, and where the opportunity to foreclose the market can incentivize one firm to lower its investment and increase its pricing power to the detriment of consumers. The model relies on the simplest possible assumptions of imperfect competition (subgame perfect equilibria with Cournot agents). We illustrate the different outcomes in a numerical example with two load steps (peak and off-peak) where we change one parameter, the height of the off-peak time segment. We find cases with increased and decreased capacity as well as no change in capacity. Since there is no general characterization of the consequences of contracts in this simple example, there can be no characterization in more complicated models that contain the market structures included here, and regulators or competition authorities cannot rely on contracts to induce sufficient capacity expansion by reducing market power. One other market mechanism that has been proposed to induce investment, a capacity auction with predetermined capacity requirements, is a potential alternative to limit market power that deserves further exploration to determine the extent to which it can provide an adequate incentive to invest in the presence of market power.     

Atoms,Bits, and Wits: A New Economics for the Twenty-First Century—Part I

Part I: Three elementary components of economics are atoms, bits, and wits. The economics of atoms is familiar to economists, in the production of physical outputs treated as substitutes in consumption. The relation of value to scarcity with atoms is that abundance reduces the worth of material goods. The realm of bits is less understood; the issues appear in network effects, where abundance augments the worth of intangibles. The economics of networks is social: conflicts of interest (substitution) are balanced with concerts of value (complementarity) in combination. But in information networks—the realm of bits—substitution cedes to complementarity and competition defers to cooperation as efficient.     

Why can an environmental policy tax promote growth through the channel of education?

This paper examines the implications of an environmental policy for growth performances. We develop a model where growth is driven by human capital accumulation. Firms invest in research to develop new technologies to reduce their pollution emissions and education is treated as product which not only enhances the productivity of individuals but also enters in their preferences. We find that a tighter environmental policy can promote growth. The reason is that a higher tax on pollution drives the prices of goods whose production is polluting up. This, in turn, enhances the willingness of individuals to acquire education.