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     

Family and sex-specific U.S. immigration from Europe, 1870–1910: A panel data study of rates and composition

This paper develops and estimates models of family and sex-specific emigration, as well as the sex composition of this emigration, from 12 European source countries to the U.S. for the period 1870–1910. The models are based on the distinction between economic migrants (males, single females, and some married females) and tied or trailing migrants (females) and are estimated with panel data, including data that relate to the occupational/industrial structure of male and female economic activity in source countries. Hausman-Taylor instrumental variable estimates suggest that although both males and females responded to labor-market signals, males were more responsive than females to per capita GDP differences. Moreover, compared to the rest of Europe, Ireland, and Scandinavia were the sources of many young, single male, and female migrants, who responded strongly to gaps in economic opportunities. In fact, much of the European response to such gaps appears to be due to migrants from Ireland and Scandinavia. Females tended to originate in English-speaking countries and countries that were agriculturally oriented. Service and manufacturing jobs in source countries discouraged the migration of females relative to males. Males tended to follow recent migrants more than females, but females responded more to long-term influences as measured by stocks of migrants from their source countries who had previously settled in the U.S. Countries with high birth rates had relatively fewer female emigrants, whereas those with high rates of natural increase 20 years earlier experienced relatively more male emigration. Intact families, other family members (including family-strategy male migrants and trailing female migrants), and single males and females responded strongly to economic incentives, but the singles were most responsive followed by family-strategy males.     

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.     

中国海外并购屡遭挫折

[英国路透社3月20日]中信证券与贝尔斯登的合作计划已经搁浅，这可能是中国海外并购活动的最新一次失败案例。     

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)