THE IMPACT OF EUROPEAN CONSUMER LAW IN THE UNITED KINGDOM*

In this paper the authors describe the consequences of European consumer law for British consumers. After an analysis of some of the difficulties which have been faced by the United Kingdom in coming to terms with its new-found status within a federal system, the article goes on to describe the progress which has been made with the programme of implementation. The third part looks at some EEC proposals which are in the pipeline at the moment and comments on some of the consequences which the prospect of EEC legislation can have for domestic reform. Finally, the authors examine the actual enforcement of EEC consumer law through the criminal process and the effects upon civil processes.     

The Potential Secondary Effects of Consumer Legislation: A Conceptual Framework

In recent years, numerous pieces of consumer-oriented legislation have been passed at both the federal and state levels. Although such laws are usually assumed to have a beneficial impact on consumers, situations may occur when either (a) the law fails to accomplish its primary objectives because of poor design and implementation, weak enforcement, and/or illegal action on the part of business firms that allow them to circum vent the law, or (b) the law leads to unforeseen strategy change by business firms that tend to minimize or nullify the expected benefits of the legislation. These unforeseen reactions or secondary effects frequently serve to weaken the law's potential benefit for the consumer. This paper focuses on the secondary effects problem by examining the kinds of strategy changes that business firms might make in response to consumer legislation and the factors affecting these changes. An analytical framework is developed for evaluating the potential costs to the consumer of these secondary effects and comparing these costs with the expected benefits to be derived from consumer protection laws.     

How Risky Are U.S. Corporate Assets?

We use market data on corporate bonds and equities to measure the value of U.S. corporate assets and their payouts to investors. In contrast to equity dividends, total corporate payouts are highly volatile, turn negative when corporations raise capital, and are acyclical. At the same time, corporate asset returns are similar to returns on equity, and both are exposed to fluctuations in economic growth. To reconcile this evidence, we argue that acyclical but volatile net repurchases mask the exposure of total payouts' cash components to economic growth risks. We develop an asset pricing framework to quantitatively illustrate this economic channel.