Interaction Between Trade and Competition: Why a Multilateral Approach for the United States?

This thesis consists of two essays and an introduction. The main theme is technological knowledge that is not based on the natural sciences.The first essay is about rules of thumb, which are simple instructions, used to guide actions toward a specific result, without need of advanced knowledge. Knowing adequate rules of thumb is a common form of technological knowledge. It differs both from science-based and intuitive (or tacit) technological knowledge, although it may have its origin in experience, scientific knowledge, trial and error, or a combination thereof. One of the major advantages of rules of thumb is the ease with which they can be learned. One of their major disadvantages is that they cannot easily be adjusted to new situations or conditions. Engineers commonly use rules, theories and models that lack scientific justification. How to include these in introductory technology education is the theme of the second essay. Examples include rules of thumb based on experience, but also models based on obsolete science or folk theories. Centrifugal forces, heat and cold as substances, and sucking vacuum all belong to the latter group. These models contradict scientific knowledge, but are useful for prediction in limited contexts where they are used when found convenient. The role of this kind of models in technology education is the theme of the second essay. Engineers’ work is a common prototype for pupils’ work with product development and systematic problem solving during technology lessons. Therefore pupils should be allowed to use the engineers’ non-scientific models when doing design work in school technology. The acceptance of these could be experienced as contradictory by the pupils: a model that is allowed, or even encouraged in technology class is considered wrong when doing science. To account for this, different epistemological frameworks must be used in science and technology education. Technology is first and foremost about usefulness, not about the truth or even generally applicable laws. This could cause pedagogical problems, but also provide useful examples to explain the limitations of models, the relation between model and reality, and the differences between science and technology.QC 20111118</p

Central Bank Independence and the `Free Lunch Puzzle': A New Perspective

A new perspective is provided on a puzzle that has emerged from the empirical lit- erature suggesting that government-independent central banks provide a `free lunch': lower in°ation is apparently achieved at no cost in terms of greater output variance. We assess the various explanations provided by the theoretical literature. After revis- iting the free lunch puzzle and con¯rming the empirical importance of open-economy effects, we develop a Rogoff-style delegation model that combines the latter with po- litical monetary cycle e®ects. We show that if all countries delegate monetary policy to government independent banks, as economies become more integrated then a low inflation, higher output variance trade-off re-emerges.central bank independence, open economy, political uncertainty

Proposal for a Single Securities Commission: Comments and Discussion

This report analyzes and comments on the principal arguments put forward by the Crawford Panel to support the establishment of a single securities commission in Canada. One argument advanced is that the current rules-based regulatory structure should be replaced with a principles-based approach similar to that of the United Kingdom’s Alternative Investment Market (AIM). According to the Panel, this approach would allow for a relaxation of the conditions for corporate financing. We will point out the very distinctive characteristics of the Canadian market, which allows emerging companies—those without income and even without any revenue—to carry out initial and subsequent rounds of financing. Our estimates indicate that such financing is carried out at an advantageous cost, and the survival of new issuers seems more certain in Canada than in other countries where the rules for listing on a stock exchange are more restrictive. We believe it would be difficult to further relax the rules of a market in which 45% of issuers are able to list their securities on a stock exchange without reporting any revenue and in which 71% of new exchange registrants do not earn any income. This situation is unparalleled in the world. We will show that adopting a system similar to the AIM model would result in a significant percentage of existing issuers no longer being able to access the market. We therefore concur fully with the opinion expressed by one of the experts enlisted by the Panel, namely, that adopting a system similar to the AIM model in Canada is neither feasible nor desirable. The Panel expressed concern about the conditions for the financing of junior issuers. We will show that, in general, the direct costs of such financings are lower in Canada than in the United States. We will see that, in fact, there is a very high number of small offerings and issues in Canada. The Canadian markets seem to have developed strategies that are well suited to the characteristics of an economy heavily dependent on small-cap companies and on the resource sector. An analysis of all financings, including traditional and non-traditional stock exchange listings as well as subsequent financings (a total of more than 10,000 transactions), clearly shows that financings are very small and are carried out locally and, in 77% of cases, by issuers from outside Ontario. The Panel also expressed concern about the level of competitiveness of the Canadian market; this is a concern that we share. We will show that the principal challenge faced by the Canadian market is the gradual shift of transactions involving cross-listed securities to the U.S. market. In contrast to the Panel, we do not believe that AIM listings constitute a major problem. When Canadian companies cross-list their securities, they opt for the U.S. market at a ratio of eight to one. The migration of companies and transactions towards the U.S. market has many causes, but it would be very difficult to argue that the regulatory structure is a key factor. The argument whereby the costs of capital are lower in the U.S. does not stand up to analysis. Several recent and thorough studies indicate that the difference in these costs between the two countries is minimal, leaning in favour of one country or the other depending on the study. Our own findings show that Canadian companies that cross-list their securities do not benefit from any lower costs. The decision to list securities on a foreign market is driven primarily by strategic business factors and by the search for large pools of investors. In that regard, Canada has no advantage, and it seems unlikely that regulatory changes will convert Canada into a significant source of financing for foreign companies. In our opinion, efforts should be focused, above all, on improving and sustaining the financing options available to Canadian issuers. The Panel has argued that establishing a single commission is necessary for improving enforcement of securities laws in Canada. In this regard, Canada is often compared to the United States. An analysis of data on sanctions shows, firstly, that the SEC is far from being the source of the majority of sanctions imposed on financial market participants. It initiates less than 10% of proceedings involving financial matters and imposes less than one quarter of all monetary sanctions. Secondly, there has been an increase in sanctions imposed in Canada in this area. Thirdly, there are major differences between Canada and other countries. This explains the differences observed and perceived as regards enforcement. The experts enlisted by the Panel have, in fact, recommended a series of eight actions and have suggested, in the eighth item, pan-Canadian enforcement of the law. Consequently, these experts have not concluded that centralization of the securities commissions is an indispensable condition for enhancing the enforcement of securities laws. The issue of costs arises very often in discussions regarding the Canadian regulatory system. Yet, there is little evidence showing that the current regulatory structure leads to significant costs for investors or issuers. The costs of the regulatory authorities represent a negligible percentage of the transaction costs borne by investors and of revenues from brokerage activities in Canada. The direct costs of regulatory authorities are lower than those incurred in other countries, when expressed on the basis of the number of reporting issuers. Finally, arguments to the effect that a single commission would generate substantial savings are less than convincing. Such savings would be possible only if the activities of securities commissions outside Ontario were virtually abolished. Three elements appear from our analysis. First and foremost, the principal arguments put forward by the Panel to justify the urgency of centralizing securities commissions in Canada do not stand up to analysis and are, at times, contradicted by the research and the experts mandated by the Panel itself. Secondly, the major challenge faced by the Canadian market—the shift of enterprises and transactions to the U.S.—does not seem to have been perceived as such or even discussed. Finally, we believe it is essential to recognize and preserve the distinctive characteristics of the existing market. It is a market that welcomes growth companies and small-cap companies, is highly decentralized and is apparently very favourable to issuers. Ce rapport analyse et commente les principaux arguments avancés par le Comité Crawford pour justifier l’instauration d’une commission des valeurs mobilières unique au Canada. Un premier argument défend que la structure actuelle de réglementation, basée sur des règles, devrait être remplacée par une approche basée sur des principes, inspirée de l’expérience de l’Alternative Investment Market (AIM) au Royaume-Uni. Selon le Comité, cette approche permettrait d’assouplir les conditions de financement des sociétés. Nous montrons les caractéristiques très particulières du marché canadien, qui permet les financements initiaux et subséquents de sociétés en développement, sans bénéfice et même sans revenu. Nos estimations indiquent que ce financement se fait à un coût avantageux, et la survie des nouveaux émetteurs semble plus assurée au Canada que dans d’autres pays où les règles d’admission en Bourse sont plus restrictives. Nous considérons qu’il semble difficile d’assouplir encore les règles d’un marché où 45 % des émetteurs s’inscrivent en Bourse sans rapporter de revenu et où 71 % des nouveaux inscrits en Bourse ne rapportent pas de bénéfice. Cette situation n’a pas d’équivalent au monde. Nous montrons que l’imposition d’un système semblable à celui de l’AIM ferait qu’une proportion importante des émetteurs actuels ne pourrait plus accéder au marché. Nous rejoignons donc totalement l’avis de l’un des experts engagés par le Comité, qui indique que l’imposition d’un système semblable à celui de l’AIM au Canada n’est ni possible, ni souhaitable. Le Comité est préoccupé par les conditions de financement des émetteurs de petite taille. Nous montrons que les coûts directs de ces financements sont, de façon générale, moins élevés au Canada qu’ils ne le sont aux États-Unis. Nous indiquons par ailleurs la fréquence très élevée des émissions et placements de petite taille au Canada. Les marchés canadiens semblent avoir développé des stratégies bien adaptées aux spécificités d’une économie qui repose fortement sur les entreprises faiblement capitalisées et sur le secteur des ressources. Lorsqu’on analyse l’ensemble des opérations de financement, incluant les entrées en Bourse conventionnelles ou non ainsi que les financements subséquents (soit plus de 10 000 opérations), il apparaît nettement que les financements sont de très petite taille, effectués localement et, à 77 %, levés par des émetteurs non ontariens. Le Comité est soucieux du niveau de compétitivité du marché canadien et nous partageons ses inquiétudes. Notamment, nous avons montré que le principal défi auquel fait face ce marché provient du glissement progressif des transactions portant sur les titres interlistés vers le marché américain. Contrairement au Comité, nous défendons que les inscriptions sur l’AIM ne constituent pas un problème majeur. Lorsqu’elles s’interlistent, les sociétés canadiennes optent pour le marché américain dans une proportion de huit à une. La migration des sociétés et des transactions vers le marché américain a des causes multiples, mais il semble très difficile de prétendre que la structure des organismes de réglementation y soit un facteur déterminant. L’argument voulant que le coût du capital soit inférieur aux États-Unis ne résiste pas à l’analyse. Plusieurs études récentes et rigoureuses indiquent que la différence, à ce niveau, est infime entre les deux pays, et le sens de la différence varie suivant les travaux. Nos propres résultats indiquent que les sociétés canadiennes qui s’interlistent ne bénéficient d’aucune diminution de ce coût. Les décisions de s’inscrire sur un marché étranger sont essentiellement liées aux considérations stratégiques des entreprises et à la recherche de bassins importants d’investisseurs. Sur ce plan, le Canada ne bénéficie d’aucun avantage et il semble peu vraisemblable que des changements réglementaires puissent faire du Canada une base importante de financement de sociétés non canadiennes. Il nous semble que les efforts devraient être, avant tout, consacrés à améliorer et pérenniser les possibilités de financement des émetteurs canadiens. Le Comité défend que l’instauration d’une commission unique est nécessaire pour améliorer l’application de la Loi au Canada. Sur ce plan le Canada est souvent comparé aux États-Unis. L’analyse des données sur les sanctions indique premièrement que la SEC n’est pas, et de loin, à l’origine de la majorité des sanctions obtenues contre des intervenants du marché financier. Elle est à l’origine de moins de 10 % des poursuites en matière financière et impose moins du quart du total des sanctions monétaires. Deuxièmement, nous observons une augmentation des sanctions imposées au Canada en ce domaine. Troisièmement, il existe d’importantes différences entre le Canada et les autres pays, qui expliquent les écarts observés et perçus dans la rigueur de l’application de la Loi. Les experts engagés par le Comité recommandent d’ailleurs un ensemble de huit actions différentes et suggèrent, au huitième point, une application pancanadienne de la Loi. Ces experts ne concluent donc pas que la centralisation des commissions des valeurs mobilières soit la condition indispensable à un renforcement de l’application de la Loi. La problématique des coûts est très souvent mentionnée dans le débat entourant la réglementation canadienne. Il existe pourtant peu d’évidence à l’effet que la structure de réglementation actuelle induit des coûts significatifs pour les investisseurs et même pour les émetteurs. Les coûts des organismes de réglementation représentent une proportion infime des coûts de transactions supportés par les investisseurs ou encore des revenus de l’activité du courtage au Canada. Les coûts directs provoqués par les organismes de réglementation sont inférieurs à ceux encourus dans les autres pays, dès qu’on les exprime sur la base du nombre d’émetteurs assujettis. Enfin, les évidences à l’effet qu’une commission unique permettrait des économies importantes semblent peu convaincantes. Ces économies ne sont possibles que si l’activité des commissions des valeurs mobilières en dehors de l’Ontario est pratiquement abolie. Trois éléments découlent de notre analyse. En premier lieu, les principaux éléments avancés par le Comité pour justifier l’urgence de centraliser les commissions des valeurs mobilières au Canada résistent mal à l’analyse et sont parfois contredits par la recherche ou par les experts mandatés par ce même Comité. En second lieu, le défi majeur auquel semble confronté le marché canadien ne semble ni être perçu comme tel, ni être traité : il s’agit du glissement des entreprises et des transactions vers les États-Unis. Enfin, il nous semble essentiel de reconnaître et préserver les caractéristiques particulières du marché actuel, largement ouvert aux sociétés en croissance et de petite taille, très décentralisé et apparemment très favorable aux émetteurs.

Determinants of exchange rates: the case of the Chilean peso

In this study, we analyzed the relationship between the exchange rate movements of two countries, Chile and the United States, by studying the underlying fundamentals given by the modern exchange rate theory. In this context, we included in our regression analysis three main economic factors. Monetary policy interest rate, money supply and inflation rates were considered for both countries since January 1990. We also included a fourth variable in our model; Copper Price. The evolution of this commodity’s price played an important role in our study as we will discover that a significant portion in exchange rates variation is explained by this variable. Copper was considered because of the increasing importance of this commodity in the Chilean economy. The results show that the determinants of the exchange rate may vary over time. The independent variables that have an effect on the exchange rate may lose their explanatory power when economic conditions change or a switch in the foreign exchange rate policy dictated by central banks or, as we proved, when variations on certain markets takes place

Electricity reform experiences in Asia, Pacific Region, GATS and privatisation of the industry

This paper examines the package of reforms often applied to the electricity industry and discusses its relevance to Sri Lanka. It examines experience in other Asian countries with these reforms. It also looks at the status of GATS in the electricity sector

Competition policy and the global trading system : a developing country perspective

Starting in the late 1980s, policy makers and academics began increasingly to call for the development of multilateral discipline on anticompetitive practices. Some believe that falling trade barriers must be complemented by antitrust measures to ensure that foreign competition materializes; some believe that without multilateral discipline it would be impossible to limit the use of anti-dumping and related policies; and some believe that the exercise of market power by global multinationals requires a global code on competition. Efforts to establish multilateral disciplines on competition have resulted only in various codes of conduct, none of them legally enforceable. But prospects for negotiating an agreement improved with the recent decision at the first ministerial meeting of the World Trade Organization (WTO) to establish a working group on the topic. The author evaluates various options from the perspective of developing countries: agreeing to minimum standards for national antitrust laws; expanding the reach of the WTO provision on nullification and impairment to policies that restrict competition; granting the WTO a mandate to advocate competition; and doing nothing. He concludes that developing counties would benefit from and agreement that: bans price-fixing and marketsharing; includes a ban on export cartels; initiates a process of replacing anti-dumping actions with enforcement of domestic competition laws; and strengthens the WTO s mandate to advocate co nt may be quite difficult, however, as some of these elements will be opposed by various special-interest groups in industrial countries.Payment Systems&Infrastructure,Environmental Economics&Policies,Economic Theory&Research,Labor Policies,Markets and Market Access,Trade and Regional Integration,ICT Policy and Strategies,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research

Democratic Enterprise : Ethical Business for the 21st Century

Published with the support of the Scottish Government and the Economic and Social Research CouncilPublisher PD

Using Constraint Programming for the Automatic Detection of Conflicts in Quality Requirements

Requirements negotiation is quite an interesting, ongoing research area. Current requirements engineering models usually propose a negotiation process with similar methods and goals. Unfortunately, only a few have partial automatic support. in this paper, we revisit one of the most mature models, Boehm’s Win–Win model. Win–Win is a qualitative, process–oriented model so that it is specially suited to be used at the early stages of requirements engineering, when knowledge about requirements is still vague, but not for quantitative, product–oriented contexts where a more precise, exact knowledge about the requirements is needed. in this paper, we present a proposal to extend and refine Win–Win in order it can be used in product–oriented contexts. The main benefit of our approach is that the same conceptual model for requirements negotiation can be used during all software development process, instead of using different models in different phasesComisión Interministerial de Ciencia y Tecnología TIC 2000–1106–C02–0