Harvesting Preemption, Industrial Concentration and Enclosure of National Marine Fisheries

This paper explores how harvesting technology can affect firms' internalisation of common pool externalities and the incentives for expanding firm's size. Focusing on supply side non-pecuniary externalities, our closed-entry harvesting competition model suggests that when marginal harvesting costs are weakly sensitive to common pool externalities, atomistic competition is likely to remain, other things equal, as the predominant industrial structure in the fishery. The avenue for increasing industrial concentration is modelled via Stackelberg leadership which offers the option of preempting rivals' production. In our static modelling, a fishery subject to Stackelberg signalling results in higher overfishing versus the case of a highly decentralised harvesting sector (proxied by the use of Nash conjectures). Given that static optimising behaviour could be interpreted as a result of entry controls and other fishing regulations being widely perceived as ineffective controls, the obtained overfishing ranking suggests that in fisheries where strategic preemption in production is feasible, but where entry controls and other important regulations on fishing effort are considered to be ineffective, overfishing is likely to remain the predominant outcome, even if other incentives promote evolution towards a more concentrated industry structure. When the fishery is already overpopulated by numerous small firms, whatever advantages large firms may have in terms of profitability, numerous small-scale fishermen tend to make up for in the political arena. This imposes constraints on the politically feasible fishing regulations. We use a second best welfare benchmark to illustrate resulting policy trade-offs.     

Property rights and long-run capital

Proprietary capital falling into the public domain inefficiently decreases capital accumulation. As a consequence, the market steady state consumption underperforms the planner's by 4.6%–9.1% in a neoclassical infinitely-lived agents economy with constant returns to scale and standard empirically supported parameters. The results extend robustly to an overlapping generations economy, for which the gap is 10.5% when similarly parametrized. A policy decentralizing, in the latter, the planner's steady state instead consists of (i) subsidizing the rental rate of private capital at its depreciation rate, and (ii) taxing households' negative net position between, on the one hand, firm and depreciated capital ownership, and on the other, borrowing. Under this policy, the necessary tax rate on households' negative net position is smaller the bigger the absolute value of the latter and, hence, the bigger the corresponding monetary real balances held by households.     

Documenting the unauthorized: Political responses to unauthorized immigration

Cultural prejudice rather than self interest is the conventional wisdom for why voters respond negatively to immigration. Using a new measure of unauthorized immigrants based on self‐reported invalid social security numbers, we show that voters’ responses are more nuanced than mere prejudice against minorities. Using county level data from the U.S. state of Georgia, we find that voters in counties with above median levels of unauthorized workers are more likely to support the Republican Party. We also find that wealthier counties and wealthier voters are most likely to respond negatively to the unauthorized. Our evidence warns against arguments that depict opposition to immigration as motivated solely by xenophobia and cultural fears among lower income Whites.     

Fighting inflation in Mexico: Theory and evidence

Mexico adopted the inflation targeting strategy in 2002, and this came together with declining inflation. According to the economic authorities, this also brought about lower pass-through of exchange rate changes into inflation. The objective of this article is to test the main hypotheses of Mexico’s prize-stabilization strategy. As a preliminary step, we show evidence whereby the interest rate has not the impact on demand assumed in the conventional view. We then estimate econometric models, which show first of all that inflation depends essentially on the evolution of labor and input costs. Then we demonstrate that higher employment and higher wages associated with higher output do not necessarily entail higher labor costs because productivity also increases when output rises. In the final section, we set forth our main conclusions, which cast doubts on some crucial aspects of the inflation targeting strategy, and propose a different interpretation about why inflation declined in this country.     

Gibrat's law test on Brazilian commercial banks

In recent years, Brazil has been one of the countries with the biggest changes in the banking sector. The process of deregulation that began in 2002 has entailed the increase of the presence of foreign banking and the increase of competition, among other aspects. In this context, the objective of this study consists in contrasting Gibrat's Law in the Brazilian commercial banking during the period of 2002–2013 with the objective of contributing with evidence for the construction of a growth model for banking that will guide the financial policy of the country. For this, the quartile regression methodology is utilized, since we consider that it analyzes the relation between growth and the size of the entities more thoroughly than the empirical contrasts given by previous empirical evidence. The results obtained indicate that there is a non-linear relation in an inverted U form between growth and size in the Brazilian commercial banking. These results allow us to affirm that the relative dispersion of the sizes of the financial entities will tend to decrease in time and with this, the concentration of the sector.