What's New
The Book!
11-Nov-2005
|
Research - Public Policy
Michele Boldrin
Intellectual Property
Social Security
European Regional Policies
For a slightly more mordacious approach to public policy discussion.........
Intellectual Property
This links you to an interconnected
series of pages debating innovation, IP, and related policy
issues. Most of these pages "live" on David's server ... Maybe one day or another
I catch up with him and start updating them myself ...
Intellectual property refers to patents,
copyrights, trademarks and other forms of ownership of ideas. It results
in monopoly power that has significant consequences for discouraging as
well as encouraging innovation and growth – the discouragement effect
is especially important when ideas are used as building blocks for
other ideas. The economics literature has examined the need for
intellectual property; optimal systems of intellectual property; the
optimal duration of intellectual property; how innovation takes place
in the absence of intellectual property; and the rent-seeking behavior
induced by intellectual property.
This is a brief discussion, which
appeared in chinese in The People's
Daily in January 2005, of why the current TRIPS agreement,
sponsored by the WTO and by western countries (USA and EU especially)
within the WTO, is a very BAD agreement. It is bad for developing
countries, as it forces them to give up competing with the advanced ones
in goods that are protected by IP legislation, and for the people of the
advanced countries as well, as it forces them to accept monopoly
pricing, higher prices and less innovation. Basically, TRIPS is
nothing but a huge income transfer (or subsidy) program from the
citizens of the world to the monopolies protected by IP law.
Our original statement that IP
protection is bad for society, and that Napster and P2P software are
good for economic progress and not just for freedom of expression.
Where it is explained why the economic (and
logical, indeed) foundations of Landes W.M. and R.Posner, The Economic Structure
of Intellectual Property Law,
Harvard U.P. 2003, are, to say the least, shaky. To be more specific,
why the "economic structure" they allegedlly provide to contemporary
intellectual property law would not pass the test of any economic theory
prelim in any self-respected Economics Ph.D. program. An abdridged version
of this paper has appeared in The Economists' Voice.
Social Security
Theory says that in an OLG context
intergenerational transfer agreements either private or carried out via
government intervention, are efficient if the induce equality between
certain implicit rates of return. We apply this
theory to the case of public education and pensions, where public
education is a loan from middle age to young and, a period later,
pensions are the repayment of this loan, plus
interest, from middle age to old. We use micro and macro data from
Spain to estimate how far actual arrangements are from the normative
goal. When
demographic stationarity is assumed, the results are surprisingly good.
We also quantify the impact of undergoing demographic change on the
implicit rates of return. The results are unsurprisingly bad. Our estimates point to dramatic changes in future
generational rate of returns. Nevertheless, and contrary to earlier
predictions in the generational accounting literature, our findings suggest
that future generations are not necessarily going to be worse o than
current ones.
First version May 1997, this
version appeared in the The Review of Economic
Studies, 2005.
When
credit markets to finance investment in the human
capital of young people are missing, the competitive equilibrium
allocation is inefficient. When generations overlap, this failure
can be mitigated by properly designed social institutions such as
Public Education and Public Pensions. We show that, when established
jointly, they implement an intergenerational transfer scheme
supporting the complete market allocation. Through the public
financing of education, the young ``borrow'' from the middle age
to invest in human capital. When employed, they ``pay back''
their debt via a social security tax, the proceedings of which
finance pension payments to the now elderly lenders. We consider
other, allocationally equivalent, financing schemes. In all cases,
when the complete market allocation is achieved a certain equality
should be observed among implicit rates of return and the market rate of
return. We test this prediction by using micro and macro data from
Spain. The results are surprisingly good. We also use the model to
quantify the impact of undergoing demographic change on the implicit
rates of return. The results point, unsurprisingly,
to dramatic changes in generational rates of return. Contrary towhat predicted by earlier studies in the generational
accounting tradition, our findings
suggest that future generations are not necessarily going to be worse offthan current ones.
- Micro Modeling of Retirement Behavior
in Spain (with S. Jimenez and F. Peracchi), in J. Gruber and D. Wise (eds), Social Security Programs and Retirement
Around the World. Micro-Estimation. The University of Chicago
Press for the NBER, 2004.
In this paper we evaluate the quantitative impact that a number of alternative reform scenarios may have on the total expenditure for public pensions in Spain. We consider five scenarios, the first three are common also to the other countries considered in this volume, while the second two correspond to specific reforms adopted by the Spanish government, respectively, in 1997 and 2002. Our quantitative findings can be summarized in two sentences. For all the reforms considered, the financial impact of the mechanical effect is order of magnitudes larger than the behavioral impact. For the two Spanish reforms, we find once again that their effect on the outstanding liability of the Spanish Social Security System is negligible: neither the mechanical nor the behavioral effects amount to much for the 1997 reform, and amount to very little for the 2002 amendment.
In this paper we use a variety of data
sources, both micro and macro, time series, cross section, and panel
data to provide an empirical evaluation of the current level of economic
well being of the Spanish elderly, and of its determinants. We focus, in
particular on the role played by the pension system.
European Regional Policies
-
"Structural Policies and Growth," in
A. Deardoff (ed.) The Past, Present,
and Future of the European Union, Blackwell Publ. Co., for the
International Economic Association, 2004. NEW!
- "Regional Policies and
E.U. Enlargement," (with F.
Canova) in B. Funck and L. Pizzati (eds.) European Integration, Regional Policy, and
Growth, The World Bank, Washington, D.C., 2003.
More
valuable than our paper is Carole Garnier's discussion of it, which you
can find here with
(interspersed) some informal comments of mine. In 2002-2003, when the WB Conference for which this
paper was written took place, Carole Garnier was Director for Regional
and Structural Policies at the EC in Bruxelles. My comments are in red, the statements of Ms. Garnier
that I find most interesting, are outlined in green.
Figures
Table 1
Table 2
Map 1
Map 2
RegioDataSet
We discuss European Regional Policies arguing
they make little sense in light of available economic theory and
evidence. Using the Eurostat "Regio" data set, covering the 211 NUTS2
Regions of the EU15 over the period 1980-1996, we look for evidence of
either a divergence or a convergence process in per capita income, labor
productivity and unemployment rates. We find no evidence of either
trend for regional per capita incomes. Exception made for the well
understood Irish miracle and smaller ones in the Italian North-East and
the Lisbon metropolitan area in Portugal, regional per capita income
tends to grow at relatively common rates across Europe. We find a
very tenuous evidence of convergence in labor productivity. Dispersion
in unemployment rates is very large and varies widely over time, still
also in this case we cannot find any evidence of a clear trend. We
supplement this results by looking more carefully at the role that
human capital, R&D, initial and geographical conditions play in
determining growth rates. We find no evidence supporting the models of
agglomeration and increasing returns upon which EU policies are
constructed. We also study the evolution of capital/labor ratios and its
impact upon measurable Total Factor Productivity. Also in this case,
increasing returns and externality based theory are strongly rejected
as all their predictions fail. We conclude our analysis by arguing that
the current EU15 regional policies are not supported by a strong case
for economic intervention but are, instead the outcome of
redistributional and political motives.
|
|
|
