Political economy

State-Level Private Enforcement Is Much More Complicated Than Previously Thought

Most of the scholarship on private enforcement, in which individual citizens sue to enforce legal statutes, has focused on federal-level laws. In new research, Diego A. Zambrano, Neel Guha, Austin Peters, and Jeffrey Xia show how expansive and messy state-level private enforcement statutes are, and explain why previous theories on private enforcement do not explain the dynamic among the states. They conclude that research on state-level private enforcement demands much more attention than previously provided.

The Economic Consequences of Political Pressure on the Federal Reserve

Politicians often interfere with central banks, but it is not clear how to measure such political pressure systematically and therefore difficult to quantify its economic consequences. In new research, Thomas Drechsel finds that political pressure strongly and persistently raises inflation and inflation expectations but has little impact on economic activity.

How Indian Pharma Can Become Global Leaders

Madan Dhanora, Mohd Shadab Danish, and Ruchi Sharma review the history of the Indian government’s efforts to encourage innovation, how these efforts have manifested in the national pharmaceutical industry, and what steps the government can take to further improve innovation.

The SEC’s Efforts To Deter Insider Trading May Just Shift It Around

In new research, Seong Jin Ahn, Jared N. Jennings, and Yanrong Jia find that SEC enforcement against insider trading does not deter subsequent insider trading so much as displace it to other actors in the same industry.

Increased Campaign Spending Grows the Economic Pie Instead of Splitting It Up

The United States has relaxed campaign finance laws over the past few decades. As a result, there exist concerns about politicians favoring special business interests over the welfare of other constituents, such as workers. In a new paper, Pat Akey, Tania Babina, Greg Buchak, and Ana-Maria Tenekedjieva examine how the 2010 U.S. Supreme Court decision in Citizens United v. Federal Election Commission affected earnings for firms and workers, as well as political turnover and polarization at the state level.

What’s Next for Copyright in the Age of Artificial Intelligence?

In new research, Christian Peukert and Margaritha Windisch review how copyright laws and practices have evolved to adapt to new technologies and discuss the various issues scholars and policymakers must address as copyright law is once again forced to adapt to the emergence of artificial intelligence.

Uninhibited Campaign Donations Risks Creating Oligarchy

In new research, Valentino Larcinese and Alberto Parmigiani find that the 1986 Reagan tax cuts led to greater campaign spending from wealthy individuals, who benefited the most from this policy. The authors argue that a very permissive system of political finance, combined with the erosion of tax progressivity, created the conditions for the mutual reinforcement of economic and political disparities. The result was an inequality spiral hardly compatible with democratic ideals.

Innovators Respond to Their Presidential Candidate Winning With More Innovation

Does an inventor’s political identity influence their productivity? In a new paper, Joseph Engelberg, Runjing Lu, William Mullins, and Richard Townsend examine the impacts of the 2008 and 2016 United States presidential elections on Democrat and Republican inventors, with a particular focus on the quantity and quality of patents after the country elects a new president.

How Well Consumers Know Prices Matters for Tax Policy

The effectiveness of tax policy depends on whether sellers pass on changes in tax rates to consumers through changes in price. In new research, Felix Montag, Robin Mamrak, Alina Sagimuldina, and Monika Schnitzer investigate how this tax pass-through in turn depends on how much consumers know about prices. They show that if consumers are not aware of how prices for the same product vary between sellers, then they will be unaffected by tax changes intended to increase or decrease consumption.

The Decay of Hong Kong’s Liberal Political Economy

The Chinese Communist Party drastically reduced Hong Kong’s autonomy in 2020 with a national security law and has cracked down on resistance ever since. The consequences have left its people culturally and economically poorer, writes Casey Moser.

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