The Economics of Ideas and the Ideas of Economists

On college campuses across the country and on millions of home computers, too, young adults download from each other digital files containing recorded music and films for their entertainment. The owners of that copyrighted material pursue the downloaders with legal action as well as the software services that facilitate it. Napster’s existence as a free file-sharing internet site was shut down in 2001, and the Supreme Court has recently ruled that a successor file-sharing service, Grokster, engaged in copyright infringement by providing an easy way for individuals to exchange files. The amount of filesharing activity is not trivial; Paul Romer (2002) estimates that Napster users were downloading at the rate of 1.5 billion downloads per month before Napster was shut down and that the consumer surplus generated by downloading roughly equaled the revenues of the recording industry.Intellectual Property, property rights, creativity

Chaos, Sunspots, and Automatic Stabilizers

We study a one-sector growth model which is standard except for the presence of an externality in the production function. The set of competitive equilibria is large. It includes constant equilibria, sunspot equilibria, cyclical and chaotic equilibria, and equilibria with deterministic or stochastic regime switching. The efficient allocation is characterized by constant employment and a constant growth rate. We identify an income tax-subsidy schedule that supports the efficient allocation as the unique equilibrium outcome. That schedule has two properties: (i) it specifies the tax rate to be an increasing function of aggregate employment, and (ii) earnings are subsidized when aggregate employment is at its efficient level. The first feature eliminates inefficient, fluctuating equilibria, while the second induces agents to internalize the externality.

Bargaining Versus Fighting

I examine the determinants of conflict and settlement by embedding probabilistic contests in a bargaining framework. Different costly enforcement efforts (e.g., arming, litigation expenditures) induce different disagreement points and Pareto frontiers. After examining the incentives for settlement, I demonstrate how different division rules and bargaining norms have real, economic effects. I then analyze some sources of conflict. I emphasize long-term, strategic considerations by examining an illustrative model and discussing particular historical examples.Conflict; Negotiation; War; Settlement; Arming; Litigation

Influence of age of child on differences in marital satisfaction of males and females in East Asian countries

Using individual-level data from China, Korea, and Japan for 2006, this research examines how the age of children of the relationship influences marital satisfaction for males and females in East Asian countries. Our results show that the marital satisfaction of males is barely affected by a child of the relationship, whereas the marital satisfaction of females with a young child is lower than that of females who do not have a child. This result holds for countries of different development stages. There is also a gender differential regarding the effect of young children on marital satisfaction. Furthermore, the more developed the country, the greater this difference becomes.Marital satisfaction, child, East Asian countries, probit

Pension Design when Fertility Fluctuates: The Role of Capital Mobility and Education Financing

This study compares alternative designs of an unfunded pension system. Convex combinations between a fixed contribution rate and a fixed benefit rate are considered. The objective is to maximize the expected ex-ante welfare under stochastic fertility. The model is a three-period CGE framework where the design of the education system and effects on factor prices are accounted for. The effects on factor prices depend on the degree of capital mobility. For low degrees of capital mobility it is optimal to have a fixed benefit rate in the pension system. But for the small open economy, a fixed contribution rate is optimal if the education system has a fixed benefit rate. This design of education and pension systems assures that individuals in the small open economy are unaffected by fertility fluctuations.pension schemes, demography, social security, education, fertility

The business cycle: it's still a puzzle

The business cycle is characterized by contractions and expansions in economic activity that are synchronized across a broad range of sectors. The authors provide evidence to document this, and survey some of the theories that have been proposed to explain it. Although much progress has been made, research in this area is still at an early age.Business cycles

Pension, Fertility, and Education

A pay-as-you-go pension scheme is associated with positive externalities of having children and providing them with human capital. In a framework with heterogeneity in productivity, and stochastic and endogenous investment in fertility and education, we discuss internalization policies associated with child benefits in the pension formula. The second-best scheme displays both a benefit contingent on the contributions of children and a purely fertility-related component.pay-as-you-go, fertility, human capital, externalities

Ketentuan-ketentuan TRIPS-Plus dalam Kerangka Perjanjian Perdagangan Bebas

Tujuan dari penelitian ini adalah untuk menganalisis dan menemukan filosofi Ketentuan TRIPS-Plus di bawah kerangka Perjanjian Perdagangan Bebas Bilateral (Bilateral Free Trade Agreements=BFTA). Penelitian ini adalah penelitian hukum dengan menggunakan pendekatan Perundang-undangan, konseptual, dan komparatif. Penelitian ini menemukan, bahwa filosofi dari ketentuan TRIPS-Plus di bawah BFTA adalah untuk menghilangkan standar minimum dan fleksibilitas yang terkandung dalam ketentuan Perjanjian TRIPS WTO yang berdampak pada: (1) pembatasan alasan untuk pengecualian dari invensi yang bisa di patenkan; (2) membatasi penerbitan lisensi wajib; (3) pembatasan ruang lingkup exhaustion of rights dan impor paralel; (4) perpanjangan jangka waktu pemberian paten; (5) kewajiban perlindungan paten untuk perlindungan varietas tanaman; (6) eksklusivitas atas uji data berkenaan dengan produk farmasi dan kimia; (7) perlindungan untuk jenis-jenis merek dagang baru (8) perlindungan yang kuat untuk teknologi digital. Bila negara-negara menyepakati BFTA dengan mitra/partner dagang tentang ketentuan-ketentuan HKI yang mengandung TRIPS-Plus tersebut di atas maka akan menyebabkan negara tersebut tidak dapat menggunakan fleksibilitas yang diberikan oleh perjanjian HKI pada level multilateral (TRIPS Agreement) dan hal tersebut berdampak pada tidak terpenuhinya hak-hak dasar yaitu: hak atas pendidikan, hak atas kesehatan dan akses obat-obatan secara terjangkau dan murah, serta hak atas pangan

Real Business Cycle Models: Past, Present, and Future

In this paper I review the contribution of real business cycles models to our understanding of economic fluctuations, and discuss open issues in business cycle research.

The Law and Economics of Databases: A Balancing Act

In this paper, I demonstrate that the existing legal frameworks for database protection are inadequate – the American framework under-protects databases, while the European framework over-protects. This paper presents an economic analysis of the current scope of legal protections for databases versus the ideal, with an especial emphasis on the role of intellectual property rights in providing these protections, and concludes with proposals for an ideal system. After an overview of the current systems of legal protections for databases in the United States (US) and the European Union (EU), there will be an explanation of how different types of laws (competition, contract, and most importantly, intellectual property rights) impact the production and innovation of databases. The analysis will show that intellectual property rights are the most comprehensive and efficient form of legal protection due to its ability to limit transaction costs, provide adequate incentives for production, and maintain a reasonable barrier to entry. The scope and specificity of legal protections affects both the static and dynamic efficiency of markets, impacting not just the health of market functions, but also the growth and development of innovation. The proper scope of protection and whether intellectual property rights are the optimal source of protection depends on the economic nature of databases. If databases were to be treated as a commodity by the law, it is necessary for the law to accurately reflect the type of good that it is regulating, as different types of goods require different incentive structures. The paper will conclude with recommendations for an ideal legal system for the protection and regulation of databases, starting with accurately defining databases and ending with reasonable terms for copyrights. The solution is to find the balance between the US and the EU systems in terms of issue definition, economic incentives, and legal theory