Does the Constitution Require That We Kill the Competitive Goose? Pricing Local Phone Services to Rivals

This Article concludes a series by these authors and Professors J. Gregory Sidak and Daniel F. Spulber, published last year in this journal. Here, Professors Baumol and Merrill address the issues surrounding the pricing of local phone services to long distance rivals, clarifying their points of agreement and disagreement with Sidak and Spulber. In their previous articles, Sidak and Spulber argued that the movement toward competition in local telephone service should be accompanied by substantial compensation to existing local telephone carriers, a view that Baumol and Merrill do not share. Rather, they note three points of disagreement between Sidak and Spulber and themselves. First, they maintain that Sidak and Spulber use an incorrect formula to determine whether the transition from regulated monopoly to competition requires compensation. Second, they argue that neither the Compensation Clause nor the regulatory contract requires compensation to take place ex ante. Finally, they do not believe that the magnitude of fixed and common costs will be significant in local telephony

Good capitalism, bad capitalism, and the economics of growth and prosperity

RESUMEN Many books take off from one core idea. This book is built on two. The first notion is that capitalism is not a monolithic form of economic organization but rather that it takes many forms, which differ substantially in terms of their implications for economic growth and elimination of poverty. The implicit assumption underlying the idea of a ho mogenous capitalism, the notion that all capitalist economies are funda mentally the same, reflects something of the mentality common during the cold war when two superpowers, representing two great ideologies, were struggling for the hearts and minds of peoples of the world. On the one side were countries like the United States, whose economies rested on the foundation of the private ownership of property, and on the other were communist or socialist societies, whose economies essentially did not. This distinction seemed to divide the two economic systems, and not much thought was given to the possibility that there is much more to capitalism

Deregulatory Takings, Breach of the Regulatory Contract, and the Telecommunications Act of 1996

Professors Baumol and Merrill reply to Deregulatory Takings and Breach of the Regulatory Contract, published last year in this Review, which argued that the price incumbents may charge potential competitors for bottleneck facilities under the Telecommunications Act of 1996 should be based not on forward-looking costs but on historical costs. Professors Baumol and Merrill contend that pricing with reference to historical costs would depart from the principles called for by economic analysis for efficient pricing and they further argue that neither the Takings Clause nor the regulatory contract precludes the use of forward-looking costs in setting prices. If a taking or regulatory breach does occur, they suggest that the proper remedy is not to interfere with the pricing decisions readied by regulators but to make the appropriate compensation, if any, after those decisions have been put into effect. Support for these legal observations is reinforced with the economic contentions that the competition introduced by the Act will have minimal effect upon incumbents which will generally receive a very valuable quid pro quo for any damage to their legitimate interests. Finally, they argue that compensating any firm for the loss of monopolistic prices threatens to undermine the most basic purpose of the Act; which is to bring the benefits of competition and competitive pricing to all electronic communications markets

Regulating Emissions of Greenhouse Gases Under Section 202(a) of the Clean Air Act

The authors consider whether the Environmental Protection Agency's denial of the petition to regulate emissions of greenhouse gases from motor vehicles under Section 202(a) of the Clean Air Act was reasonable in light of the global nature of greenhouse gas emissions and the likely superiority of other methods for combating greenhouse gases.Environment, Health and Safety, Regulatory Reform, Other Topics

On the Economics of Musical Composition in Mozart's Vienna

music ; economic models

Parity Pricing and Its Critics: Necessary Condition for Efficiency in Provision of Bottleneck Services to Competitors.

The paper will show tha bottleneck input service sold by its owner to competitors in the supply of final product must be priced in accord with ECPR if ineffeciency in resource allocation is to be prevented.PRICING;COMPETITION;MONOPOLIES

Why growth equals power - and why it shouldn't : constructing visions of China

When discussing the success of China's transition from socialism, there is a tendency to focus on growth figures as an indication of performance. Whilst these figures are indeed impressive, we should not confuse growth with development and assume that the former necessarily automatically generates the latter. Much has been done to reduce poverty in China, but the task is not as complete as some observers would suggest; particularly in terms of access to health, education and welfare, and also in dealing with relative (rather than absolute) depravation and poverty. Visions of China have been constructed that exaggerate Chinese development and power in the global system partly to serve political interests, but partly due to the failure to consider the relationship between growth and development, partly due to the failure to disaggregate who gets what in China, and partly due to the persistence of inter-national conceptions of globalised production, trade, and financial flows

Price adjustment in the London housing market

Recent research into the dynamic adjustment of prices within the London housing market is extended via the application of a novel two-step procedure. Combining the non-parametric analysis of the ranking distributions of the levels and changes in house prices with the application of a cross-sectional convergence technique, the analysis results in the detection of a three-tier system in which highly significant convergence clubs are identified within borough-level data. These findings contrast with both the divergence apparent when considering all boroughs and the failure of previous research to identify convergent groupings. The novelty of the empirical methods is supplemented by a discussion of various theoretical factors such as gentrification, displaced demand, immigration, foreign investment and criminal activity in relation to the findings obtained

Multifractality in Time Series

We apply the concepts of multifractal physics to financial time series in order to characterize the onset of crash for the Standard & Poor's 500 stock index x(t). It is found that within the framework of multifractality, the "analogous" specific heat of the S&P500 discrete price index displays a shoulder to the right of the main peak for low values of time lags. On decreasing T, the presence of the shoulder is a consequence of the peaked, temporal x(t+T)-x(t) fluctuations in this regime. For large time lags (T>80), we have found that C_{q} displays typical features of a classical phase transition at a critical point. An example of such dynamic phase transition in a simple economic model system, based on a mapping with multifractality phenomena in random multiplicative processes, is also presented by applying former results obtained with a continuous probability theory for describing scaling measures.Comment: 22 pages, Revtex, 4 ps figures - To appear J. Phys. A (2000