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While the popular image of the Sherman Act is that of a “trust-busting” statute, conduct remedies have been more common than structural relief. This paper evaluates the effect on economic welfare of conduct remedies that have resulted from ten prominent Sherman Act monopolization cases. In general, we find that in some cases the behavioral relief has had no consequence other than the cost of litigation and cost of compliance; in other cases, the remedies probably reduced consumer welfare. Cases studied are United Shoe Machinery, AT&T, Std. Oil of California, IBM, United Fruit, Kodak, Safeway, GM, Jerrold, and Blue Chip Stamp.

This study analyses the effect of fuel efficiency increase on travel demand in the city of Berlin. Vehicle technologies such as advanced driver assistance systems can help drivers to save fuel and thus lower exhaust emissions on a network level. In order to obtain high political endorsement among different stakeholders, the analysis of such effects which have an impact on overall fuel and emission savings are highly relevant. Recent testing of so called advanced driver assistance systems showed their ability to reduce fuel consumption and lower traffic emissions by giving driving recommendations to drivers.

Two effects on driving were simulated using a travel demand model: the increase in fuel prices which will take place in the coming years and a possible increase in vehicle fuel efficiency. Comparing these scenarios allowed us to calculate the effect of price change and the rebound effect of fuel efficiency gains using standard methods for transport elasticities. The simulation was run with the travel demand model TAPAS and the city of Berlin was the network used as a case study.

As fuel prices increase over time, driving tends to decrease. Driving increases, however, if vehicles become more fuel efficient and the result is the observed rebound effect. On a city network level, this also translates to lower emission savings than expected from the vehicle fuel efficiency gains. The rebound effect which we estimated matches similar findings in the literature, specifically in terms of their magnitude.

We used a simulation to compare scenarios of city travel demand. The result allowed us to estimate changes to the desired variables of fuel efficiency and fuel prices. For those interested in the effects of vehicle efficiency gains on city level these results are highly recommended for consideration.

The proposed framework for analysing rebound effects helped to assess the impacts of energy efficiency technologies on a city level.

Purpose – To identify how agricultural biotechnology addresses the two challenges facing agriculture: to feed a world growing to 9 billion people by 2050 and to provide a liquid fuel alternative to petroleum.

Design –This chapter relies on econometric modeling, a review of existing literature, and diagrammatic modeling to articulate the impact of agricultural biotechnology on food and energy markets.

Findings –Agricultural biotechnology reduces the tension between food security and biofuel production. It reduces volatility in food and fuel markets and can mitigate risk to biofuel processors.

Originality – The analysis is original although it relies on previous research to some extent. The analysis is compared to and contrasted with related work.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Over the past decade, biofuels production in the European Union and the United States has boomed – much of this due to government mandates and subsidies. The United States has now surpassed Brazil as the world's leading producer of ethanol. The economic and environmental impact of these biofuel programs has become an important question of public policy. Due to the complex intersectoral linkages between biofuels and crops, livestock as well as energy activities, CGE modeling has become an important tool for their analysis. This chapter reviews recent developments in this area of economic analysis and suggests directions for future research.

A full Edgeworth cycle of deposit rate is divided into two phases: an “overcutting cycle” in which the banks battle for deposits, and a “relenting cycle” in which the banks cease battling and instead choose to restore a temporarily low deposit rate. Such strategies have two testable implications on overall market movements. First, deposit rate decreases are more likely to be initiated when the deposit rate is near the upper bound of a cycle. Second, deposit rate decreases are more sensitive than increases to market interest rate changes. This chapter empirically confirms this pattern and shows strong evidence for the presence of Edgeworth cycles in deposit rates after Hong Kong’s interest rate deregulation.

Global imbalances and financial crisis discussed in the preceding chapters were not the only contemporary issues that shaped the current and future landscape of the world economy. Since 2004, many countries also felt a significant shock prompted by a surge in the oil price, forcing them to look for the appropriate policy response that would produce least pain and minimum impact on welfare. The fact that oil remains an important source of energy for many countries, developed and developing alike, a price surge can trigger a new round of global conflicts. Indeed, from the hording of grain in Neolithic times to rivalry over resources in the interimperial wars of the 16th–19th centuries that laid the groundwork for World War I, and to modern nations warring over oil, competition and the desire to have a control over the possession of critical sources of vital materials had always been at the center of conflicts from the very beginning of human story. To prop up their industrialization, for a long period of time developed countries had relied on a stable supply of oil, making their political and strategic relations with oil-producing countries so critical, yet fragile and crisis prone. Conflicts and wars over oil were fought among the oil-producing countries as well.¹ Although it was not admitted by the U.S. administration, at least not publicly, the desire to have greater control over oil was also the primary reason for the 2003 U.S. invasion of Iraq.

Mises (1949[1963], p. 692) explains that market-failure justifications for state actions, such as economic regulation “ascribe to the state not only the best intentions but also omniscience.” He then points out that neither assumption is valid: government is not benevolent since both, those who are employed by the state and those who demand state actions, have subjective self-interests, and it is not all knowing since knowledge is widely dispersed and the cost of coordination is infinitely high, particularly without market profits and prices as coordinating mechanisms. Furthermore, Mises suggests that dropping either assumption undermines the conclusions that state intervention is necessarily desirable even if some sort of market failure is actually identified. Austrian economists in the Mises tradition have tended to focus on the knowledge problem in their challenges to regulation, however. Many Austrians obviously recognize the interest problem, of course, but they often assume it away in order to illustrate that government interference with markets is not desirable even if it is well intended. In contrast, public-choice analysis tends to focus on the interest problem as source of government failure, although some public-choice analysts also obviously recognize the knowledge problem. Indeed, this difference in perspective is so pronounced that Ikeda (1997, p. 240) explicitly distinguishes between Public Choice and Austrian political economy by suggesting that the Austrian approach assumes benevolence on the part of government officials, while the public-choice approach assume narrow interests.¹ Ikeda (1997, p. 150) also suggests that the separation of these two approaches is justified because “Austrian political economy and public choice are each capable of standing on their own [so] public-theorists…find it optimal simply to continue to pursue their research along the line of either the former or the latter approaches.” The following presentation questions this assertion. Instead, both assumptions should be dropped, and the resulting integrated Austrian-public-choice model should be expanded to include assumptions about the relationships between regulations, property rights security, and both market and political behavior.²