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Articles 1 - 11 of 11
Full-Text Articles in Law
State Finance In Times Of Crisis, Brian Galle, Jonathan Klick
State Finance In Times Of Crisis, Brian Galle, Jonathan Klick
All Faculty Scholarship
As recent events illustrate, state finances are pro-cyclical: during recessions, state revenues crash, worsening the effects of economic downturns. This problem is well-known, yet persistent. We argue here that, in light of predictable federalism and political economy dynamics, states will be unable to change this situation on their own. Additionally, we note that many possible federal remedies may result in worse problems, such as creating moral hazard that would induce states to take on excessively risky policy, both fiscal and otherwise. Thus, we argue that policy makers should consider so-called “automatic” stabilizers, such as are found in the federal tax …
Future Generations: A Prioritarian View, Matthew D. Adler
Future Generations: A Prioritarian View, Matthew D. Adler
All Faculty Scholarship
Should we remain neutral between our interests and those of future generations? Or are we ethically permitted or even required to depart from neutrality and engage in some measure of intergenerational discounting? This Article addresses the problem of intergenerational discounting by drawing on two different intellectual traditions: the social welfare function (“SWF”) tradition in welfare economics, and scholarship on “prioritarianism” in moral philosophy. Unlike utilitarians, prioritarians are sensitive to the distribution of well-being. They give greater weight to well-being changes affecting worse-off individuals. Prioritarianism can be captured, formally, through an SWF which sums a concave transformation of individual utility, rather …
Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr.
Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr.
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The usual reaction if one mentions bankruptcy as a mechanism for addressing a financial institution’s default is incredulity. Those who favor the rescue of troubled financial institutions, and even those who prefer that their assets be promptly sold to a healthier institution, treat bankruptcy as anathema. Everyone seems to agree that nothing good can come from bankruptcy. Indeed, the Chapter 11 filing by Lehman Brothers has been singled out by many the primary cause of the severe economic and financial contraction that followed, and proof that bankruptcy is disorderly and ineffective. As a result, ad-hoc rescue lending to avoid bankruptcy …
Reconceptualizing Trespass, Gideon Parchomovsky, Alex Stein
Reconceptualizing Trespass, Gideon Parchomovsky, Alex Stein
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This Essay addresses an anomaly in trespass law. Trespass law is generally understood as the paradigmatic example of property-rule protection: an owner can obtain an injunction against the trespasser and have him removed from her land. The property-rule protection enjoyed by the owner protects her right to exclude others and to set the price for the use of her property. However, the property-rule protection only exists ex ante: it avails only against imminent or ongoing trespasses. Ex post, after a trespass ends, the owner can only recover compensation measured by the market value of the unauthorized use, i.e., the going …
The Legal Origins Theory In Crisis, Lisa Fairfax
The Legal Origins Theory In Crisis, Lisa Fairfax
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The Legal Origins Theory purports to predict how countries respond to economic and social problems. Specifically, the legal origins of the United States should strongly influence the manner it approaches economic problems and its approach should be distinct from the response of civil law countries. If the theory is accurate, America's legal tradition should have a profound impact on its response to the crisis. This Article seeks to test the boundaries of the theory by assessing whether it could have predicted the manner the U.S. responded to the current economic crisis. After analyzing the U.S. response to the crisis, this …
Passive Discrimination: When Does It Make Sense To Pay Too Little?, Jonah B. Gelbach, Jonathan Klick, Lesley Wexler
Passive Discrimination: When Does It Make Sense To Pay Too Little?, Jonah B. Gelbach, Jonathan Klick, Lesley Wexler
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Economists have long recognized employers’ ability to construct benefits packages to induce workers to sort themselves into and out of jobs. For instance, to encourage applications from individuals with a highly valued but largely unobservable characteristic, such as patience, employers might offer benefits that patient individuals are likely to value more than other individuals. By offering a compensation package with highly valued benefits but a relatively low wage, employers will attract workers with the favored characteristic and discourage other individuals from applying for or accepting the job. While economic theory generally views this kind of self-selection in value neutral terms, …
Federalism, Variation, And State Regulation Of Franchise Termination, Jonathan Klick, Bruce Kobayashi, Larry Ribstein
Federalism, Variation, And State Regulation Of Franchise Termination, Jonathan Klick, Bruce Kobayashi, Larry Ribstein
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This article discusses and expands on our recent work examining the effects of franchise-termination laws. In a prior article, we examined empirically the effect of franchise-termination laws on the level of franchise activity. Our analysis improved upon the prior literature in two major ways. First, our work exploited two new sources of panel data to provide new empirical evidence on the effect of franchise termination laws. Second, our analysis examined variation in states’ restrictions on the ability of franchisors and franchisees to contract around a particular state’s regulation. We found that the effects of termination laws on the overall level …
Bankruptcy Boundary Games, David A. Skeel Jr.
Bankruptcy Boundary Games, David A. Skeel Jr.
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For the past several decades, Congress has steadily expanded the exclusion of securities market operations from core bankruptcy protections. This Article focuses on three of the most important of these issues: the exclusion of brokerage firms from Chapter 11; the protection of settlement payments from avoidance as preferences or fraudulent conveyances; and the exemption of derivatives from the automatic stay and other basic bankruptcy provisions. In Parts I, II and III of the Article, I consider each of the issues in turn, showing that each has had serious unintended consequences. Both Drexel Burnham and Lehman Brothers evaded the brokerage exclusion, …
United States Competition Policy In Crisis: 1890-1955, Herbert J. Hovenkamp
United States Competition Policy In Crisis: 1890-1955, Herbert J. Hovenkamp
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The development of marginalist, or neoclassical, economics led to a fifty-year long crisis in competition theory. Given an industrial structure with sufficient fixed costs, competition always became "ruinous," forcing firms to cut prices to marginal cost without sufficient revenue remaining to pay off investment. Early neoclassicists such as Alfred Marshall were not able to solve this problem, and as a result many economists were hostile toward the antitrust laws in the early decades of the twentieth century. The ruinous competition debate came to an abrupt end in the early 1930's, when Joan Robinson and particularly Edward Chamberlin developed models that …
The Effects Of Tort Reform On Medical Malpractice Insurers’ Ultimate Losses, Patricia Born, W. Kip Viscusi, Tom Baker
The Effects Of Tort Reform On Medical Malpractice Insurers’ Ultimate Losses, Patricia Born, W. Kip Viscusi, Tom Baker
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Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show the greatest effects of joint and several liability limits, noneconomic damages caps, and punitive damages reforms for the firms that are at the high …
Unentrapped, William W. Bratton