Regulation EC 723 (MA, Ph.D.)

Wednesday 4:30-7:10pm, Archer 462A

Final Exam December 16th 5:40pm-7:30pm

 

 

Dr. Benjamin Powell

Department of Economics

73 Tremont St. Office 1020

bpowell@suffolk.edu (best way to reach me)

617-573-8023

http://mail.beaconhill.org/~bpowell/

Office Hours: Tuesday and Wednesday 2-3:30pm and by appointment

 

This course will introduce students to economic theories of regulation.  We will explore theories of market failure and the rationale for regulation.  We will explore how regulators function in differing institutional environments.  With this analytic toolkit we will then study various topical areas of regulation including: Monopoly and Antitrust, Environmental, Health, Safety, Financial Market, Housing, and Vice.  This year we’re also spending two weeks evaluating regulations that contributed to the recent housing and financial crisis.

 

Expectations:  You are expected to read each week’s assigned readings BEFORE coming to class and to be prepared to discuss them.  Readings will come from the books, professional journal articles, and policy studies.  Graduate school is about transforming from a consumer of economics to a producer of new economic knowledge.  Unless you engage and digest the readings on your own before class you will have difficulty making the transition. 

 

Books:

 

Kip Viscusi, Joseph Harrington, and John Vernon.  Economics of Regulation and

Antitrust 4th ed.   MIT Press. 2005.

 

Dominick Armentano. Antitrust and Monopoly.  Independent Institute.  1996.

 

Jim Leitzel, Regulating Vice.  Cambridge University Press. 2007.

 

William Mitchell and Randy Simmons.  Beyond Politics.  Westview. 1994.

 

Grading:

            Final Exam                               30%

            Midterm Exam              20%

            Term Paper                              30%

            Quizzes/Participation                 20%

 

 

 

Tentative Schedule

 

Sept. 9                  Intro & Market Failure                   

Viscusi et al Chapters 1 & 2

Mitchell & Simmons Chapter 1

 

Sept. 16                The Economics of Politics

Mitchell & Simmons Chapters 2, 3, 4, & 6.                     

 

Sept. 23                The Economic Theory of Regulation

Viscusi et al. Chapter 10. 

Stigler, G. (1971) “The Theory of Economic Regulation.”  The Bell Journal of Economics and

Management Science.  Vol. 2 (1): 3-21.

Peltzman, S. (1976) “Toward a More General Theory of Regulation.”  Journal of Law and

Economics.  Vol. 19(2): 211-240.

Becker, G. (1983) “A Theory of Competition Among Pressure Groups for Political Influence.” 

Quarterly Journal of Economics.  Vol. 98(3): 371-400.

Peltzman, S. (1993) “George Stigler’s Contribution to the Economic Analysis of Regulation.” 

Journal of Political Economy.  Vol. 101(5): 818-832.

Glaeser, E. and Shleifer, A. (2003) “The Rise of the Regulatory State.”  Journal of Economic

Literature 41: 402-425.

Benson, B. (2004) “Opportunities Forgone: The Unmeasurable Costs of Regulation.”  Journal of

Private Enterprise 19: 1-25.

McChesney, F. (1987) “Rent Extraction and Rent Creation in the Economic Theory of

Regulation.”  Journal of Legal Studies 16: 101-118.

Yandle, B. (1983) “Bootleggers and Baptists – The Education of a Regulatory Economist.” 

Regulation.  Vol. 7(3): 12-16.

 

Sept. 30                Health and Safety

Viscusi et al Chapter 19, 22, & 23.

Peltzman, S. (1975) “The Effects of Automobile Safety Regulation.  Journal of Political

Economy 83(4): 677-726.

Alamar, B. and Glantz, S. (2004) “Smoke-Free Ordinances Increase Restaurant Profit and Value. 

Contemporary Economic Policy 22(4): 520-525.

Henderson, David (2007) “Smoking in Restaurants: Who Best to Set the House Rules?”  Econ

Journal Watch 4(3): 284-291.

 

Oct. 7                             Environmental   

Viscusi et al Chapter 21.

We will work on an applied environmental economic problem that the Beacon Hill Institute is currently researching.  Readings TBA. 

Yandle, B. (1998) “Bootleggers, Baptists, and Global Warming.”  PERC Policy Series 14:

http://www.perc.org/articles/article193.php

 

Oct. 14                 Midterm Exam

 

Oct. 21                 Housing (State and Local)

Holcombe, R. and Powell B. (eds.) (2009) Housing America: Building Out of a Crisis. 

Transaction.  Electronic version to be distributed.

 

 

Oct. 28                 Housing and Financial Crisis I

 

For this week and the next we’ll be debating the recent books that attempt to explain the current housing and financial crisis.  Each student (or pair of students) will be assigned a single book that they will be responsible for presenting.  Each Student will also be expected to read and prepare a critique of one of the books.  We’ll all participate in a general discussion debating the merits of each book.  Other news articles may be assigned as well. 

 

Books:

            Taylor, John (2009) Getting Off Track

            Sowell, Thomas (2009) The Housing Boom and Bust

            Woods, Thomas (2009) Meltdown

            Posner, Richard (2009) A Failure of Capitalism

            Krugman, Paul (2009) The Return of Depression Economics and the Crisis of 2008

            Shiller, Robert (2008) The Subprime Solution

 

Nov. 4                   Housing and Financial Crisis II

 

Continued from Previous Week.

                                                                                               

Nov. 11                 Drugs and Alcohol

Leitzel, Chapters 1 through 8. 

Thornton, M. “The Repeal of Prohibition.”  In The Economics of Prohibition.  Will hand out hard

copy in class.

 

Nov. 18                 Monopoly & Antitrust

Viscusi et al. Chapters 3 & 4.

Armentano Chapters 1 & 2.

Kovacic, W. and Shapiro, C. (2000) “Anitrust Policy: A Century of Economic and Legal

Thinking.”  Journal of Economic Perspectives 15: 43-60.

 

Dec. 2                   Historical Application of Antitrust Law

Armentano Chatpers 3 & 4.

DiLorenzo, T. (1985) “Origins of Antitrust: An Interest Group Perspective.”  International

Review of Law and Economics 5: 73-90.

 

Dec. 9                   Mergers, Price Discrimination, and Tying                          

Viscusi et al. Chapters 6, 7, 8, & 9.

Armentano Chapter 6, 7, 8, & 9.                                    

 

 

 

FINAL EXAM December 16th 5:40pm-7:30pm