The intended and unintended consequences of financial-market regulations: A general-equilibrium analysis

The Intended and Unintended Consequences of Financial-Market Regulations: A General Equilibrium Analysis

In a production economy with trade in financial markets motivated by the desire to share labor-income risk and to speculate, we show that speculation increases volatility of asset returns and investment growth, increases the equity risk premium, and reduces welfare. Regulatory measures, such as constraints on stock positions, borrowing constraints, and the Tobin tax have similar effects on fina...

Intended and Unintended Consequences of Prison Reform∗

Since the 1970s, U.S. federal courts have issued court orders condemning state prison crowding. However, the impact of these court orders on prison spending and prison conditions is theoretically ambiguous because it is unclear if these court orders are enforceable. We examine states’ responses to court interventions and show that these interventions generate higher per inmate incarceration cos...

Food Aid’s Intended and Unintended Consequences

This paper surveys the existing empirical evidence on the unintended consequences of food aid. Micro-level evidence is presented on the impacts of food aid deliveries on household labour supply, production incentives, consumption patterns and natural resource use. At the meso-level, evidence on the impact of food aid on market development, market prices, informal insurance arrangements, and the...

The Unintended Consequences of Planning Regulations

The Unintended Consequences of Clinical Trials Regulations

Alex McMahon and colleagues critique the International Conference on Harmonisation (ICH) guidance on good clinical practice (GCP), arguing that it is having a disastrous effect on noncommerical randomized clinical trials in Europe.