Microeconomic regulation

Jon Danielsson, 25 May 2018

The advent of cryptocurrencies has captured the imaginations of consumers, businesses, and investors alike. Policymakers are grappling to regulate them, while economists are still working out the potential that cryptos have to disrupt financial markets. In this Vox Talks, Jon Danielsson takes a different view, explaining why cryptos "just don't make sense", and why they should be treated with some scepticism. 

Koen Frenken, Arnoud van Waes, Magda Smink, Rinie van Est, 03 April 2018

The success of Airbnb and Uber has heralded the rise of online platforms and marketplaces for goods and services. This column identifies public interests that are common to most sharing and gig platforms, and presents a policy framework based on four basic policy options: enforce existing regulations, enact new regulations, deregulate, or tolerate.

Ron Anderson, Chikako Baba, Jon Danielsson, Heedon Kang, Udaibir Das, Miguel Segoviano, 15 February 2018

Current stress testing of banks is focused on the resiliency of individual banks to exogenous shocks. This column describes how the next generation of macroprudential stress tests aim to capture the endogenous nature of systemic risk caused by the interaction of all the institutions and markets making up the financial system. This will lead to a better policy mix aimed at preserving financial stability.

Alex Edmans, Vivian Fang, Allen Huang, 07 November 2017

Worries about the dangers of short-term incentives for CEOs are rarely backed by rigorous evidence. This column uses data over a ten-year period to show that short-term contracts lead CEOs to undertake repurchases and M&A activity that have negative long-term consequences. The results suggest that the horizon of CEO incentives is a more important dimension to reform than the size of pay packets.

Toby Nangle, Matt Tickle, 20 April 2017

While defined benefit pension schemes are typically viewed as users rather than sources of sponsor-firm funds, the considerations taken into account when firms choose to scale contributions are such that they become indistinguishable from other firm financing decisions. This column analyses how pension scheme funding deficits arise and argues that whilst deficits do not exist by design, firms’ decision to fund or underfund a defined benefit scheme might usefully be examined as one of many competing sources of long-term finance.

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