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Bulletin
19 FEBRUARY 1987
IN
THIS ISSUE...
The contents of this
Bulletin range over a variety of CEPR's research programmes. In recent
years there have been considerable advances in analysis of the strategic
aspects of international trade policy. A January workshop discussed
empirical application of these theoretical advances. Also reported are
CEPR workshops on the implications for competition policy for recent
privatization and deregulation, the performance of financial markets in
the presence of rapid innovation, and proposals for exchange rate
'target zones'. The Bulletin contains reports of lunchtime meetings on
the abolition of domestic rates and the UK housing market, as well as on
obstacles to wider share ownership in the United Kingdom. The series of
meetings on British demography continues, with reports of talks on
divorce and remarriage and on the growing elderly population.
Strategic Trade Policy
Conventional analyses of international trade policy, in which markets
are perfectly competitive and strategic behaviour is absent, fail to
explain why governments might wish to subsidize and promote certain
firms. More recent analyses of trade policy have emphasized strategic
behaviour by firms and governments, and this has been thefocus of a
joint CEPR/NBER research programme. A January workshop discussed
empirical applications of this new approach.
Privatization
Participants at a January workshop considered the implications for
regulation and competition policy of recent privatization groups in
Europe.
Financial Innovation
A CEPR workshop explored whether the rapid rate of change in the
financial sector has increased it's vulnerability.
Exchange rate target zones
Unhappiness with the experience of freely floating exchange rates has
revised proposals for international monetary reform. The Centre bought
together leading advocates of 'target zones' to discuss their proposals.
Lunchtime Meetings
Abolition of Domestic rates
Gordon Hughes told a lunchtime meeting in January that abolition of
domestic rates in the United Kingdom could increase house prices by as
much as 25% in some areas, three times as much as the government
suggested.
Economics
of Divorce and Remarriage
Each additional year of work experience increases the odds of
divorce by woman by 6%, according to new research by John Ermisch.
Patterns of divorce and remarriage mean that women who remain heads of
one-parent families are often those least able to support them.
Wider
Share Ownership
The Uk government is actively encouraging more individuals to become
shareholders. At a February lunchtime meeying, paul Grout analysed the
obstacles to wider share ownership.
Ageing
Population
Pat Thane questioned whether the elderly will in fact be a growing
burden to society.
Discussion Papers
Andrew Hughes Hallet argues that many analyses of the time
inconsistency of optimal policy may themselves be inconsistent.
Alasdair Smith analyses the relationship between the strategic
investment decisions of multinational corporations and the effectiveness
of trade embargoes.
Daniel Cohen and Philippe Michel argue that control
theory can be useful in designing optimal policies, despite the
problems of time inconsistency.
In three papers Marco Pagano explores models which explain the thinness
of a market and its effect on the volatility
of prices.
Sweder van Wijnbergen analyses the effects of public
sector deficits in the presence of 'Keynesian' and 'Classical'
unemployment.
Jonathan Zeitlin proposes a new approach to labour
history, focusing on the role of institutional forces in shaping
industrial relations.
Nick Crafts explores the role of long-term unemployment in explaining 1930's
wage behaviour.
Louka Katseli and Nicholas Glytsos model the factors influencing Greek
emigration and repatriation.
Richard Blundell, John Ham and Costas Meghir extend the standard model
of female labour force participation to
incorporate involuntary unemployment.
Andrew Hughes Hallet argues that coordinated
economic policies may be more robust to 'information errors'.
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