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Regulation and the Macroeconomy

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  • John W. Dawson

Abstract

This article uses the number of pages in the Code of Federal Regulations to investigate the empirical relationship between federal regulation and macroeconomic performance in the U.S. The analysis uses an aggregate production framework to study the co‐movement of output and the factors of production that results from regulation. The use of cointegration methodology overcomes some shortcomings of traditional techniques. The results suggest that regulation generally is negatively related to aggregate economic performance in both the short run and the long run. Some specific areas of regulation are also found to have important long‐run effects, some positive and some negative.

Suggested Citation

  • John W. Dawson, 2007. "Regulation and the Macroeconomy," Kyklos, Wiley Blackwell, vol. 60(1), pages 15-36, February.
    • Handle: RePEc:bla:kyklos:v:60:y:2007:i:1:p:15-36
    DOI: 10.1111/j.1467-6435.2007.00357.x
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    1. Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2005. "Regulation And Investment," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 791-825, June.
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    5. Junsoo Lee & Mark C. Strazicich, 2013. "Minimum LM unit root test with one structural break," Economics Bulletin, AccessEcon, vol. 33(4), pages 2483-2492.
    6. Mulligan, Casey B. & Shleifer, Andrei, 2003. "Population and Regulation," Working Papers 190, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
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    9. John W. Dawson & John J. Seater, 2005. "The Macroeconomic Effects of Federal Regulation," Working Papers 05-02, Department of Economics, Appalachian State University.
    10. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
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    Cited by:

    1. D.W. MacKenzie, 2008. "Supercapitalism – By Robert Reich," American Journal of Economics and Sociology, Wiley Blackwell, vol. 67(2), pages 381-389, April.
    2. Bjørnskov, Christian, 2016. "Economic freedom and economic crises," European Journal of Political Economy, Elsevier, vol. 45(S), pages 11-23.
    3. D. W. MacKenzie, 2010. "The Predatory State by James Kenneth Galbraith," American Journal of Economics and Sociology, Wiley Blackwell, vol. 69(2), pages 881-891, April.
    4. Pontus Braunerhjelm & Johan E. Eklund, 2014. "Taxes, tax administrative burdens and new firm formation," Kyklos, Wiley Blackwell, vol. 67(1), pages 1-11, February.
    5. Johan E. Eklund & Emma Lappi, 2018. "Product regulations and persistence of profits: OECD evidence," Journal of Regulatory Economics, Springer, vol. 54(2), pages 147-164, October.
    6. Sumit K. MAJUMDAR, 2014. "Regulation And Job Creation: An Analysis Of Institutional Change And Its Consequences," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(2), pages 305-325, June.

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    More about this item

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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