João Pedro Chaia’s Post

*Vale a pena refletir sobre o caso brasileiro sob essa perspectiva conceitual e analítica apresentada neste belo texto do sempre excelente Cass Sunstein. Igualmente, esse parece ser um dos possíveis pontos de partida para se explorar um tema muito raro (e muito importante) na discussão da "melhoria institucional" da economia brasileira.* *The Economic Constitution of the United States* "Suppose that the US Department of Transportation wants to issue a new regu-uppose that the US Department of Transportation wants to issue a new regulation, one that would require all new motor vehicles in the United States tolation, one that would require all new motor vehicles in the United States to be equipped with some state-of-the-art safety technology. Will the regulationbe equipped with some state-of-the-art safety technology. Will the regulation go forward? The answer might well lie in the hands of the Office of Information and go forward? The answer might well lie in the hands of the Office of Information and Regulatory Affairs (OIRA), a small office in the Office of Management and Budget.Regulatory Affairs (OIRA), a small office in the Office of Management and Budget. Headed by an administrator who is nominated by the president and confirmed byHeaded by an administrator who is nominated by the president and confirmed by the Senate, OIRA consists of policy analysts, economists, and lawyers, who will askthe Senate, OIRA consists of policy analysts, economists, and lawyers, who will ask whether the benefits of the new regulation would justify the costs. That question whether the benefits of the new regulation would justify the costs. That question is asked not only for motor vehicle safety regulations; it is also asked for climateis asked not only for motor vehicle safety regulations; it is also asked for climate change regulations, occupational safety regulations, water pollution regulations,change regulations, occupational safety regulations, water pollution regulations, immigration regulations, animal welfare regulations, airline safety regulations, and immigration regulations, animal welfare regulations, airline safety regulations, and many others as well. But how do agencies assess costs and benefits? Where will theymany others as well. But how do agencies assess costs and benefits? Where will they look? As it turns out, the United States has something like an Economic Constitution, designed to answer those questions. Most Americans, and even most economists, know nothing about it. Its focus is on human welfare, understood essentially in the economic terms of cost-benefit analysis, with occasional doses of political philosophy (emphasizing, for example, obligations to future generations and the The Economic Constitution of the United States"                                           - ■■ Cass R. Sunstein

Interesting new article by my The Knee Center colleague Conor Norris in the Journal of Economics and Finance. The abstract: States commonly rely on occupational licensing laws to protect consumers; however, these laws can have substantial costs. As the recognition of the costs of licensing has grown, many states have been implementing reforms. The most common reform is the universal recognition of out-of-state licenses, which makes it easier to transfer a license from another state. Using spatial econometrics techniques, I examine factors related to a state’s choice to adopt universal recognition, testing whether adoption can be explained by proximity or characteristics within a state. Relying on a spatial autoregressive model, I find evidence that universal recognition adoption can be explained by the tightness of the labor market, economic conservatism, and fewer licensing barriers, suggesting that adoption of the reform is largely driven by characteristics of each state. While the diffusion of policy is usually influenced by the adoption of neighbors, for universal recognition, this does not appear to be the case. #licensing #research

New Insights on Policy Adoption! Dr. Stefano Carattini, Assistant Professor of Economics, has published research showing that systematically studying policy experiences can significantly improve policy adoption outcomes. This approach could be a game changer for policymakers seeking more effective and widely accepted policies. Discover the full article here to learn more: https://lnkd.in/g4sdsCEQ

I am pleased to announce the publication of my new article, titled "COVID-19 as a Catalyst for Hegemonic Change? Exposing Neoliberal and Neoconservative Threats to Brazilian Liberal Democracy," in the journal Socialism and Democracy by Taylor & Francis. https://lnkd.in/dabXhwut

The Role of Government in Economics The Founding Fathers agreed with Adam Smith that the greatest threat to economic prosperity is the arbitrary intervention of the government into the economic affairs of private business and the buying public. Historically, this has usually involved fixing prices, fixing wages (sound familiar with the minimum wage and union push) controlling production, controlling distribution, granting monopolies, or subsidizing certain products. (Obamas Green Movement). Never the less, there are four areas of legitimate responsibility which properly belong to government. These involve the policing responsibilities of government to prevent: 1.Illegal Force in the market place to compel purchase or sale of products.Think about the healthcare mandates) 2. Fraud in misrepresenting the quality, location, or ownership of the item being sold or bought. 3. Monopoly which eliminates competition and results in restraint of trade. (Obamacare) 4.Debauchery of the cultural standards and moral fiber of society by commercial exploitation of vice...pornography, obscenity, drugs, liquor, prostitution, or commercial gambling. The perspective of the Founders in the economic role of government may be gathered from sentiments such as these by Washington: Let vigorous measures be adopted; not to limit the prices of articles, for this I believe is inconsistent with the very nature of things, and impracticable in itself, but to punish speculators, forestallers, and extortioners, and above all to sink the money by heavy taxes. To promote public and private economy; encourage manufacturers, etc. (Fitzpatrick, Writings of George Washington, 14:313.). Kamala and the socialist movement has done exactly the opposite.

On November 7, 2024, the Supreme Court of India passed a landmark judgment reinterpreting Article 39B of the Constitution to exclude private properties from the ambit of "material resources of the community." While previously, all resources of an individual could fall under Article 39B for redistribution by the State, the re-interpretation strikes a balance between property rights and public welfare. Now, private properties "may" fall within Article 39B only upon meeting certain conditions. Indicatively, this judgment clarifies that only certain resources—such as forests, ponds, wetlands, spectrum, airwaves, minerals, and natural gas—when privately owned, may be subject to redistribution by State, given their scarcity and finite nature. What I find fascinating are the many real-world implications of this judgment beyond legal theory, and how it serves to contour India's economic policy in this era of privatisation. It also potentially opens avenues for litigation against past State Acts that nationalized or redistributed privately-owned resources and industries in the spirit of Article 39B. A bit of context- while the earlier interpretation aligned with the idea of a socialist India, it created a fundamental clash with India's economic priorities post the 1991 liberalisation and the right to property formalised under Article 300A of the Constitution. Infact, the Constituent Assembly debates reveal that lawmakers never sought any one economic structure for India, but rather believed in economic democracy, leaving it to the future generations to decide the best way forward to achieve it. This scope of interpretation invites some crucial questions for all of us. Should the State have the authority to override individual property rights for the greater good? What should be the limits and mechanisms for distributing private resources—should the State adopt policies that subtly guide usage, or take more direct approaches like nationalization? Given India's current economic landscape, what’s the optimal way to manage our shared resources? These are, indeed, million-dollar questions that deserve discourse beyond legal theory. Civil society and other stakeholders must engage in these discussions, as the implications extend far beyond the legal domain—they affect our daily lives, our values, and our collective future. A nuanced interpretation of "material resources of the community" could well shape how India addresses complex questions of growth, equity, and sustainability looming upon us. Moreover, by reversing an age old jurisprudence, the Supreme Court of India has reaffirmed how the Constitution of India is a living document that aligns with the changing times, values and economic priorities of the country. The stage is now set for us to address some complex questions for our future!!

#Antitrust #AbuseofDominance Last week, the International Center for Law & Economics submitted comments (linked below) on the Article 102 TFEU (Abuse of Dominance) Draft Guidelines published by the European Commission. The Draft Guidelines, unfortunately, do not provide much guidance on how economic agents should construe Competition Law. They could be summarized as a effort to lower the legal standard and burden of proof to find an abuse of dominance and do that resorting to formalistic categorizations and watering down the "effects-based" analysis. The Draft Guidelines are, apparently, motived by the belief that more “vigorous” enforcement of Art. 102 TFEU is needed "in view of growing market concentration in various industries and the digitisation of the Union economy". But evidence of a general trend of market concentrations is shaky; and, as we know, market concentration is not, in itself, a bad thing. Moreover, moving competition law away from the “effects-based” approach (or “more-economic” approach) is apt to make it more hostile to novel business conduct and to punish pro-competitive business conduct. From a policy perspective, it would be unwise, to say the least, to take such a turn at a time when Europe is lagging other global markets in productivity and competitiveness (see, i.e., the Draghi Report). Dirk Auer,Lazar Radic Geoffrey Manne.

Our Senior Fellow, Cento Veljanovski, writes on the evolution of the admissibility of expert economic evidence in competition cases. Sir Marcus Smith, President of the Competition Appeal Tribunal, has expressed concerns over the way economists give evidence in competition cases. Namely, economists do not understand and adhere to the rules of evidence, and their use of statistical evidence differs from how lawyers and judges think about evidence. Here I respond to these claims as an economist expert witness to show that the ‘interplanetary divide’ between lawyers and economists is not as stark as portrayed and can be reconciled and accommodated. As the role of economic evidence has increased so too has the complexity of competition cases generating challenges for the courts, lawyers, parties and experts. Stricter adherence to the rules of evidence is not however the key to regulating expert evidence. The CAT has an arsenal of possible controls and is innovating new procedural rules to encourage the relevance and proportionality of expert evidence. The interpretation of statistical evidence poses a challenge for the parties and the court. The challenge comes not so much from its technical nature and different concepts of proof but the selective presentation of results that favour the experts’ respective clients which impair its probative value as shown in Royal Mail. The court can be expected to respond by developing clear protocols for the admissibility of such evidence. See article at https://lnkd.in/e9Tqd9-d

Okun’s Law - the macro oddity that could matter now There can be no #recession without #unemployment and no expansion without strong job creation. So much so that this relationship generated an economic theory: #Okun's Law, named after the economist who postulated it, Arthur Okun, Professor of Economics at Yale University and an adviser to former US President John F. Kennedy’s Council of Economic Advisers. The theory links the concept of the ‘#employment gap’ and its relationship with economic growth, which is central to Okun’s Law. Under it, for instance, a 1% lower unemployment rate would result in 2% more economic growth. This week, Simply put looks at what this relationship indicates about US GDP growth in 2024. The chart below shows a dusted version of this relationship with an employment gap currently in the region of -1%. With that level, Okun’s Law infers that US real #growth should be exceeding its long-term trend. Our estimates show that this excess growth could be of as much as 1.3%, bringing 2024's expected growth to 3.2%. Is that already priced in markets? That's the one million Dollar question of the day. Read more here on Lombard Odier Investment Managers's website here: https://lnkd.in/eYSyPH4X #macro #multiasset

Introduction: Understanding Justice Nagarathna's Dissent Justice BV Nagarathna's dissenting opinion in the Demonetization Case stands as a significant critique of one of India's most controversial economic policies. In her recent address at NALSAR University, she provided insights into the rationale behind her dissent and raised pertinent questions about the efficacy and legality of demonetization. This essay delves into the key aspects of Justice Nagarathna's critique, examining the impact of demonetization on various stakeholders, the legality of the decision-making process, and the broader implications for economic policy in India. Challenges to Demonetization's Objectives: Assessing the Effectiveness Justice Nagarathna's critique begins with a probing examination of demonetization's stated objectives and its actual outcomes. She highlights the discrepancy between the government's aim of curbing black money and the overwhelming return of demonetized currency to the Reserve Bank of India (RBI). This raises critical questions about the effectiveness of demonetization in achieving its intended goals and its unintended consequences. Impact on the Common Man: Unveiling the Human Cost Central to Justice Nagarathna's dissent is her concern for the common man, who bore the brunt of demonetization's disruptive effects. By vividly depicting the struggles of daily wage laborers and marginalized communities, she underscores the human cost of abrupt policy decisions. This section examines the socioeconomic impact of demonetization on vulnerable populations and the failure of the policy to alleviate their hardships. Communication and Preparedness Issues: Analyzing Policy Implementation Justice Nagarathna raises critical questions about the communication strategy and preparedness surrounding demonetization. She critiques the lack of foresight in adequately informing citizens and stakeholders about the impending policy shift. Moreover, the abruptness of the decision left little time for individuals and businesses to adapt, exacerbating the chaos and confusion in the aftermath of demonetization. Legality and Decision-Making Process: Scrutinizing the Legal Framework A central aspect of Justice Nagarathna's dissent revolves around the legality of the demonetization decision and the decision-making process employed by the government. She argues that the executive notification bypassed the established legislative procedures, raising concerns about constitutional propriety and democratic principles. This section delves into the legal intricacies of demonetization and the implications for governance and rule of law. RBI's Role and Independence: Assessing Regulatory Oversight Justice Nagarathna questions the role of the Reserve Bank of India (RBI) in the demonetization process, particularly its independence and autonomy in decision-makin