SIEPR Discussion paper No. 01-025
Identification and Inference in Nonlinear Difference-In-Differences Models
Susan Athey and Guido W. Imbens
May 2002

SIEPR Discussion paper No. 03-016
Electricity Regulation in California and Input Market Distortion
Mark R. Jacobsen and Azeem M. Shaikh
January 2004

SIEPR Discussion paper No. 07-016
Electricity Regulation in California and Input Market Distortion
Nir Jaimovich and Sergio Rebelo
September 2007

SIEPR Discussion paper No. 07-015
Behavioral Theories of the Business Cycle
Nir Jaimovich and Sergio Rebelo
October 2006

SIEPR Discussion paper No. 07-014
Can News About the Future Drive the Business Cycle?
Nir Jaimovich and Sergio Rebelo
September 2006

SIEPR Discussion paper No. 07-013
Firm Dynamics, Markup Variations, and the Business Cycle
Nir Jaimovich
March 2007

SIEPR Discussion paper No. 07-012
Income Effects and Indeterminacy in a Calibrated One-Sector Growth Model
Nir Jaimovich
March 2007

SIEPR Discussion paper No. 07-011
Firm Dynamics and Markup Variations: Implications for Sunspot Equilibria and Endogenous Economic Fluctuation
Nir Jaimovich
October 2006

SIEPR Discussion paper No. 07-010
The Young, the Old, and the Restless: Demographics and Business Cycle Volatility
Nir Jaimovich and Henry E. Siu
March 2007

SIEPR Discussion paper No. 03-001
Determinants of Stock Market Volatility and Risk Premia
Mordecai Kurz, Hehui Jin and Maurizio Motelese
October 2003

SIEPR Discussion paper No. 02-034
The Role of Expectations in Economic Fluctuations and the Efficacy of Monetary Policy
Mordecai Kurz, Hehui Jin and Maurizio Motelese
Revised November 2003

SIEPR Discussion paper No. 99-029
Sources of U. S. Economic Growth in a World of Ideas
Charles I. Jones
July 2000

SIEPR Discussion paper No. 99-024
Why Do Blacks Live in The Cities and Whites Live in the Suburbs?
Patrick Bajari and Matthwe E. Kahn
Revised March 2001

SIEPR Discussion paper No. 06-045
Rational Diverse Beliefs and Economic Volatility
Mordecai Kurz
August 2007

SIEPR Discussion paper No. 06-044
Diverse Beliefs and Time Variability of Risk Premia
Mordecai Kurz and Maurizio Motelese
August 2007

SIEPR Discussion paper No. 06-003
Risk Premia, Diverse Belief and Beauty Contests
Mordecai Kurz and Maurizio Motelese
August 2006

SIEPR Discussion paper No. 06-002
Beauty Contests Under Private Information and Diverse Beliefs: How Different?
Mordecai Kurz
August 2006

SIEPR Discussion paper No. 04-006
Measuring the Ex-Ante Social Cost of Aggregate Volatility
Mordecai Kurz
February 2005

SIEPR Discussion paper No. 04-004
Diverse Beliefs, Forecast Errors and Central Bank Policy
Mordecai Kurz
January 2005

SIEPR Discussion paper No. 03-001
Determinants of Stock Market Volatility and Risk Premia
Mordecai Kurz, Hehui Jin and Maurizio Motelese
October 2003

SIEPR Discussion paper No. 02-034
The Role of Expectations in Economic Fluctuations and the Efficacy of Monetary Policy
Mordecai Kurz, Hehui Jin and Maurizio Motelese
Revised November 2003

SIEPR Discussion paper No. 482
Special Economic Zones as Catalysts for Transition
John M. Litwack, Yingyi Qian
November 1996

One of the early strategic decisions in Chinese reform was the establishment of several special economic zones. These areas received both relatively high levels of investment and favorable tax treatment. We interpret this strategy as an appropriate response to two critical problems facing the reformers at this time: (1) A limited ability to commit due to the lack of institutions to constrain the state from expropriation, and (2) a political constraint to meet significant basic requirements in social policy. The interaction between these two problems can cause the economy to be caught in a low-equilibrium trap if limited resources are spread too thinly. By concentrating resources in special economic zones, this trap might be avoided in at least some areas of the economy, which could also eventually generate important spillover effects elsewhere. Thus, in the presence of important commitment and political problems, special economic zones can serve as catalysts for transition, despite the resulting (inefficient) diversion of resources and growth in regional inequality.

SIEPR Discussion paper No. 483
Strategic Commitments and the Principle of Reciprocity in Interconnection Pricing
Nicholas Economides, Giuseppe Lopomo, Glenn Woroch
September 1996

We discuss the effects of strategic commitments and of network size in the process of setting interconnection fees across competing networks. We also discuss the importance of the principles of reciprocity and imputation of interconnection charges on market equilibria. Reciprocity means that both networks charge the same for interconnection. Imputation means that a network charges its customers as much as it charges customers of the other network for the same service. Assuming that each consumer cannot subscribe to more than one network, we begin by analyzing a game of strategic symmetry where the two networks choose all prices simultaneously. Second, we allow a dominant network to set the interconnection fee before the opponent network can set its prices. This results in a price-squeeze on the rival network. Third, we show that the imposition of the reciprocity rule eliminates the strategic power of the first mover. Under reciprocity, one network sets the common interconnection fee at cost, and the equilibrium prices for final services are lower than in the two previous games without reciprocity. Moreover, prices under reciprocity obey the principle of imputation. In the long run, consumers subscribe to one of the two networks. Typically, there is a multiplicity of equilibria, including corner equilibria, where all consumers subscribe to the same network. However, under reciprocity, there are no corner equilibria.

SIEPR Discussion paper No. 484
Regulatory Pricing Rules To Neutralize Network Dominance
Nicholas Economides, Giuseppe Lopomo, Glenn Woroch
November 1996

This paper evaluates the effectiveness of several pricing rules intended to promote entry into a network industry dominated by an incumbent carrier. Drawing on the work of Cournot and Hotelling, we develop a model of competition between two interconnected networks. In a symmetric equilibrium, the price of cross-network calls exceeds the price of internal calls. This "calling circle discount" tends to "tip" the industry to a monopoly equilibrium as would a network externality. By equalizing charges for terminating calls, reciprocity eliminates differences between internal and cross-network prices and makes monopoly less likely. Imputation counteracts an incentive by the dominant network to "price squeeze" a rival by eliminating differences in the wholesale price of termination and the implicit price for internal use. By increasing profits of rival networks and increasing their subscribers' surplus, imputation supports additional entry. Finally, an unbundling rule reduces termination fees charged by a network that was engaging in pure bundling. Again, entry will be facilitated as rival networks offer potential subscribers a more attractive rate schedule.