New World Gold Cultural Anxiety and Monetary Disorder in Early Modern Spain

Elvira Vilches examines economic treatises, stories of travel and conquest, moralist writings, fiction, poetry, and drama to reveal that New World gold ultimately became a problematic source of power that destabilized Spain’s sense of ...

Agglomeration effects in foreign direct investment and the pollution haven hypothesis

Does environmental regulation impair international competitiveness of pollution-intensive industries to the extent that they relocate to countries with less stringent regulation, turning those countries into "pollution havens"? We test this hypothesis using panel data on outward foreign direct investment (FDI) flows of various industries in the German manufacturing sector and account for several econometric issues that have been ignored in previous studies. Most importantly, we demonstrate that externalities associated with FDI agglomeration can bias estimates away from finding a pollution haven effect if omitted from the analysis. We include the stock of inward FDI as a proxy for agglomeration and employ a GMM estimator to control for endogenous time-varying determinants of FDI flows. Furthermore, we propose a difference estimator based on the least polluting industry to break the possible correlation between environmental regulatory stringency and unobservable attributes of FDI recipients in the cross-section. When accounting for these issues we find robust evidence of a pollution haven effect for the chemical industry. © 2008 Springer Science+Business Media B.V.

Entry and competition in generic biologics

Patents for several blockbuster biological products are expected to expire soon. The Food and Drug Administration is examining whether biologies can and should be treated like pharmaceuticals with regard to generics. In contrast with pharmaceuticals, which are manufactured through chemical synthesis, biologies are manufactured through fermentation, a process that is more variable and costly. Regulators might require extensive clinical testing of generic biologies to demonstrate equivalence to the branded product. The focus of the debate on generic biologies has been on legal and health concerns, but there are important economic implications. We combine a theoretical model of generic biologies with regression estimates from generic pharmaceuticals to estimate market entry and prices in the generic biologic market. We find that generic biologies will have high fixed costs from clinical testing and from manufacturing, so there will be less entry than would be expected for generic pharmaceuticals. With fewer generic competitors, generic biologies will be relatively close in price to branded biologies. Policy makers should be prudent in estimating financial benefits of generic biologies for consumers and payers. We also examine possible government strategies to promote generic competition. Copyright © 2007 John Wiley & Sons, Ltd.

Environmental policy and technological change

The relationship between technological change and environmental policy has received increasing attention from scholars and policy makers alike over the past ten years. This is partly because the environmental impacts of social activity are significantly affected by technological change, and partly because environmental policy interventions themselves create new constraints and incentives that affect the process of technological developments. Our central purpose in this article is to provide environmental economists with a useful guide to research on technological change and the analytical tools that can be used to explore further the interaction between technology and the environment. In Part 1 of the article, we provide an overview of analytical frameworks for investigating the economics of technological change, highlighting key issues for the researcher. In Part 2, we turn our attention to theoretical analysis of the effects of environmental policy on technological change, and in Part 3, we focus on issues related to the empirical analysis of technology innovation and diffusion. Finally, we conclude in Part 4 with some additional suggestions for research.

The Role of Social Cognition and Person Perception in Economic Social Decision-Making

Social decision-making is often complex, requiring the decision-maker to make social inferences about another person in addition to engaging traditional decision-making processes. However, until recently, much research in neuroeconomics and behavioral economics has examined social decision-making while failing to take into account the importance of the social context and social cognitive processes that are engaged when viewing another person. Using social psychological theory to guide our hypotheses, four research studies investigate the role of social cognition and person perception in guiding economic decisions made in social contexts. The first study (Chapter 2) demonstrates that only specific types of social information engage brain regions implicated in social cognition and hinder learning in social contexts. Study 2 (Chapter 3) extends these findings and examines contexts in which this social information is used to generalize across contexts to form predictions about another person’s behavior. Study 3 (Chapter 4) demonstrates that under certain contexts these social cognitive processes may be withheld in order to more effectively complete the task at hand. Last, Study 4 (Chapter 5) examines how this knowledge of social cognitive processing can be used to change behavior in a prosocial group context. Taken together, these studies add to the growing body of literature examining decision-making in social contexts and highlight the importance of social cognitive processing in guiding these decisions. Although social cognitive processing typically facilitates social interactions, these processes may alter economic decision-making in social contexts.