Archive for August 1st, 2022

Profile and contribution of Richard Posner: transformed law and economics to economic analysis of law

August 1, 2022

Jean-Baptiste Fleury and Alain Marciano profile works of Richard Posner:

Richard A. Posner was the most important actor in the transformation from “law and economics” to an “economic analysis of law”. Posner applied Chicago price theory to the analysis of law and legal rules. He not only contributed to the field but also structured it. This is what this chapters shows. We also show that Posner’s work illustrates the Chicagoan dimension of his economic analysis of law. That Posner, especially later in his career, introduced some elements that might seem to be at odds with Chicago economics – pragmatism, notably – or that he claimed having become a Keynesian does not change much to the claim that it was Posner who crafted Chicago’s economic analysis of law.

 

Rise and Fall of Empires in the Industrial Era: A Story of Shifting Comparative Advantages

August 1, 2022

Roberto Bonfatti & Kerem Coşar in this new NBER paper:

The last two centuries witnessed the rise and fall of empires.

We construct a model which rationalises this in terms of the changing trade gains from empires. In the model, empires are arrangements that reduce trade cost between an industrial metropole and the agricultural periphery.

During early industrialisation, the value of such bilateral trade increases, and so does the value of empires. As industrialisation diffuses, and as manufactures become more differentiated, trade becomes more multilateral and intra-industry, reducing the value of empires.

Our results are consistent with long-term changes in income distribution and trade patterns, and with previous historical arguments.


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