Category: Centres of excellence

Journal Article: ‘Financial market segmentation and choice of exchange rate regimes’ Abstract:We study the choice of exchange rate regime in a small open economy with segmented asset markets subjected to financial sector shocks. We show that the state-contingent optimal policy facilitates risk sharing between asset market participants and non-participants, and is counter-cyclical. Our results establish that contrary to existing literature, flexible exchange rates mimic optimal policy and welfare dominates fixed exchange rates. Authors’ Name : Vipul Mathur & Chetan Subramanian URL : http://www.sciencedirect.com/science/article/pii/S0165176516300647 Journal : Economics Letters Volume, Issue, Page Numbers: Volume 142, May 2016,…

Abstract : This article estimates welfare effects of accelerated generic entry via Paragraph-IV challenges. Using data from 2000-2008 for hypertension drugs in the U.S. we estimate demand using a random coefficients logit model. We find consumers gain $42 billion while producers lose $32.5 billion from entry. This modest $9.5 billion gain in social welfare is consistent with our observation that overall consumption does not increase after entry – generic sales displace branded sales, shifting surplus downstream from producers to consumers, insurance companies, and retailers. We demonstrate significant cross-molecular substitution and…