Copyright (c) 2008 All rights reserved. http://works.bepress.com/joshuagans Recent documents in Joshua S Gans en-us Sun, 24 Aug 2008 15:07:04 PDT 3600 http://works.bepress.com/joshuagans/19 http://works.bepress.com/joshuagans/19 Sun, 22 Jun 2008 23:15:47 PDT The purpose of this postscript is to review the many responses to our AussieMac proposal since we first published the original paper on the 26th of March, 2008. As we shall see, our study triggered a significant amount of industry comment, media attention and, more recently, government inquiry--indeed, much more than we initially anticipated. Christopher Joye Financial Economics http://works.bepress.com/joshuagans/18 http://works.bepress.com/joshuagans/18 Mon, 12 May 2008 22:42:18 PDT This report examines policy options for parental leave and evaluates them from an economics perspective. It finds that:The goal of parental leave policy is to facilitate a frictionless transition between work/career activities and home/parental activities.There are several potential market failures that could be generated that mean that private decisions with regard to parental leave do not reflect their social counter-parts. The sources of these market failures are liquidity constraints and indivisibilities in work and home tasks. The consequences may be an under-provision of parental leave from a child development perspective as well as a sub-optimal allocation of workers to jobs and firm-specific training as a result of gender-based discrimination.A combination of policies can be used to mitigate these market failures. These include:Minimum-wage parental leave, paid for by the government, for one parent (for 3 to 6 months). This element is to cover the social security element of having children and would provide incentives for parental leave to be taken in contrast to existing payments such as the baby bonus which do not. This leave could be means-tested.Income-contingent loans, secured by the government, based on previous and future household income (for 3 to 6 months). This would address the liquidity issue associated with taking parental leave. It would promote child development but would have a minimal fiscal impact on tax-payers. Consequently, it is equitable in contrast to schemes that involve lump-sum government hand-outs.Return to work tax credits, paid for by the government to employers who have employees take parental leave and then return to work (for a minimum period). These payments would be made contingent upon criteria that demonstrated re-integration of the employer with their career in the firm. Joshua S. Gans Public economics http://works.bepress.com/joshuagans/17 http://works.bepress.com/joshuagans/17 Wed, 26 Mar 2008 13:00:24 PDT There is a new global financial crisis emerging caused by the collapse of sub-prime lending in the United States. As with previous capital market dislocations, Australia has not been insulated from the instability. The 'primary' market for residential mortgage-backed securities in Australia has for all intents and purposes evaporated. The consequence of this is that smaller banks, building societies and non-bank lenders that used the process of securitisation to provide housing finance over the last decade have either severely rationed credit or withdrawn from the market altogether. As a result, the Big-5 banks have dramatically increased their share of the mortgage market, albeit at the cost of acute balance sheet pressures.Australia needs a policy solution that will guarantee the provision of the 'public goods' of a minimum level of liquidity and price discovery in the mortgage-backed securities market during future financial crises. Failure to act with a systematic policy response will see the heightened competition that emerged in the mortgage market over the past 10 years significantly dissipate with a likely further casualty being the low home loan margins that households have enjoyed during this period. In such an environment, home owners and businesses may not receive the full benefit of attempts by the Reserve Bank of Australia to reduce interest rates.We propose that the Commonwealth Government sponsor an enterprise - 'AussieMac' - that would leverage the Government's AAA-rating to issue low-cost bonds and acquire high-quality mortgage-backed securities from Australian lenders just as Fannie Mae and Freddie Mac have done in the United States (and the CMHC in Canada). AussieMac's role as a long-term liquidity provider would be especially important during periods of capital market failure when third-party funding for Australian home loans can disappear with potentially dire ramifications for the financial system. While this enterprise would have to be closely monitored and controlled, it would not constitute a significant near-term drain on public funds. Instead, it would restore stability and long-term confidence to both the primary and secondary mortgage markets in Australia and ensure that the vigorous level of competition that has characterised the housing finance industry will continue into the future. Christopher R. Joye Financial Economics http://works.bepress.com/joshuagans/16 http://works.bepress.com/joshuagans/16 Wed, 13 Feb 2008 16:33:04 PST This report updates the Innovation Index created by Michael Porter and Scott Stern with data through 2006. It focuses on Australia's performance and policies. Joshua S. Gans Economics of innovation http://works.bepress.com/joshuagans/15 http://works.bepress.com/joshuagans/15 Wed, 07 Nov 2007 13:48:21 PST In an earlier paper (Gans and Leigh, 2006a), we analysed the effect of the introduction of the $3,000 "Baby Bonus" for children born on or after July 1, 2004. We demonstrated that parents behaved strategically in order to receive this benefit, with over 1000 births being "moved" so as to ensure that their parents were eligible for the Baby Bonus. On July 1, 2006, the payment was increased by $834. In this paper, we analyse births in 2006, and find that again, a large number of births were moved. We estimate that over 600 births were moved from June 2006 to July 2006, with unknown and potentially adverse health consequences. Joshua S. Gans Economic demography http://works.bepress.com/joshuagans/14 http://works.bepress.com/joshuagans/14 Tue, 30 Oct 2007 12:42:42 PDT This paper provides an analysis of a non-cooperative pairwise bargaining game between agents in a network. We establish that there exists an equilibrium that generates a coalitional bargaining division of the reduced surplus that arises as a result of externalities between agents. That is, we provide a non-cooperative justification for a cooperative division of a non-cooperative surplus. The resulting division is akin to the Myerson-Shapley value with properties that are particularly useful and tractable in applications. We demonstrate this by examining firm-worker negotiations and buyer-seller networks. Catherine C. de Fontenay Industrial organisation Bargaining http://works.bepress.com/joshuagans/13 http://works.bepress.com/joshuagans/13 Wed, 24 Oct 2007 16:47:15 PDT Recent anti-trust decisions have proposed remedies for tying of different computer software and applications. The remedies have drawn criticism for being ineffectual. This paper develops a model tailored to deal with the specific issue of tying in computer applications. It provides a rationale for such tying and also any associated harm to social welfare. It then examines proposed remedies and finds conditions under which those remedies will be effective in improving social welfare. Joshua S. Gans Industrial organisation http://works.bepress.com/joshuagans/12 http://works.bepress.com/joshuagans/12 Tue, 09 Oct 2007 16:40:51 PDT In 1979, Australia abolished federal inheritance taxes. Using daily deaths data, we show that approximately 50 deaths were shifted from the week before the abolition to the week after. This amounts to over half of those who would have been eligible to pay the tax. Although we cannot rule out the possibility that our results are driven by misreporting, our results imply that over the very short run, the death rate may be highly elastic with respect to the inheritance tax rate. Joshua S. Gans H26 I12 http://works.bepress.com/joshuagans/11 http://works.bepress.com/joshuagans/11 Tue, 09 Oct 2007 16:40:49 PDT Voluntary purchases of offsets for carbon emissions have been criticized as potentially increasing emissions. However, Joshua S. Gans argues that even if offsets do increase the consumption of carbon intensive goods, net emissions will always fall because these goods will become less carbon intensive. Joshua S. Gans L94 Q42 Q58 http://works.bepress.com/joshuagans/10 http://works.bepress.com/joshuagans/10 Thu, 09 Aug 2007 21:17:33 PDT This paper provides a new explanation for tying that is not based on any of the standard explanations - efficiency, price discrimination, and exclusion. Our analysis shows how a monopolist sometimes has an incentive to tie a complementary good to its monopolized good in order to transfer profits from a rival producer of the complementary product to the monopolist. This occurs even when consumers - who have the option to use the monopolist's complementary good - do not use it. The tie is profitable because it alters the subsequent pricing game between the monopolist and the rival in a manner favorable to the monopolist. We show that this form of tying is socially inefficient, but interestingly can arise only when the tie is socially efficient in the absence of the rival producer. We relate this inefficient form of tying to several actual examples and explore its antitrust implications. Dennis W. Carlton Industrial organisation