After a very long hiatus, economists have begun again to study the relationship between economics and religion. This article seeks to summarize and evaluate the principal themes and empirical findings that have appeared in some 200 recent papers on the economics of religion. Although some of the research concerns the economic consequences of religiosity, most applies standard economic theory to the study of individual religious activity, the characteristics of religious groups, and the impact of regulation and competition on religious markets

Federal Reserve Regulation A imposes formal guidelines on borrowing from the discount window and ensures that the facility is used for appropriate purposes. In a way, this regulation imposes a nonprice mechanism that compels depository institutions to be more prudent in exercising their borrowing privileges. In the 1980s, however, banks became increasingly more reluctant to borrow adjustment credit from the discount window. This behavior is puzzling because discount window guidelines have not changed. This paper investigates the reasons behind the weakened demand for borrowed reserves. Our empirical findings suggest that the growing reluctance to borrow stems from the deteriorating financial position of banks during this period. In particular, banks avoided the discount window because they feared that market participants might have interpreted their visits as a signal of serious funding difficulties

From 1863–1935, regulators imposed contingent liability on bank shareholders to discourage risk taking. Using data from 1900 to 1915, I find that banks subject to stricter liability rules have lower equity and asset volatility, hold a lower proportion of risky assets, and are less likely to increase their investment in risky assets when their net worth declines, consistent with the hypothesis that stricter liability discourages commercial bank risk taking. These findings provide lessons for current bank regulatory policy and show that the shape of the residual claimant's payoff function has a significant impact on managerial incentives and firm performance

We document that an SEC investigation of an underwriter imposes indirect penalties on the underwriter and its past clients, particularly IPO clients. Targeted underwriters experience large declines in IPO market share and increased regulatory scrutiny and client risk after an SEC investigation is announced. Stock prices of clients decline significantly. We attribute these effects to a sudden deterioration in the value of the underwriter's reputation capital, suggesting that the general assumption in prior IPO research that underwriter reputation is stationary may be inappropriate. Our results also suggest that the SEC's power to institute investigations should be considered when designing optimal securities regulation

This paper investigates the usefulness of a dynamic analysis of audit‐market competition in terms of audit‐market‐share mobility, audit‐firm entry, and audit‐firm exit. These dynamic measures of market structure are compared between the more regulated German audit market and the more liberal Dutch audit market. Prior research on audit market structure has focused on static analyses in terms of seller concentration of single national audit markets. By using data on the number of auditors as the measure of audit‐firm size, this paper covers all firms active in the two audit markets in the period 1970 to 1994. The results indicate that the more liberal Dutch audit market has the highest dynamic measures of market structure and the highest concentration. Hence, the results show that high concentration can go hand in hand with high‐market‐share mobility and high audit‐firm entry and exit. The results for market‐share mobility also hold for an analysis including only the largest audit firms. The paper therefore concludes, that compared with a static seller concentration analysis, an analysis of audit‐market dynamics provides a better description of the degree of competition in audit markets

We examine the profit efficiency of US banks chartered between 1980 and 1994. Our results suggest that profit efficiency improves rapidly at the typical de novo bank during its first three years of operation, but on average takes about nine years to reach established bank levels. Excess branch capacity, reliance on large deposits, and affiliation with a multibank holding company are associated with low profit efficiency at de novo banks. De novo national banks are initially less profit efficient than are state-chartered de novos, perhaps reflecting differences in the chartering philosophy of federal and state bank regulators

Transactions take place in the rm rather than in the market because the rm o ers agents who make speci c investments power. Past literature emphasizes the allocation of ownership as the primary mechanism by which the rm does this. Within the contractibility assumptions of this literature, we identify a potentially superior mechanism, the regulation of access to critical resources. Access can be better than ownership because: i) the power agents get from access is more contingent on them making the right investment; ii) ownership has adverse e ects on the incentive to specialize. The theory explains the importance of internal organization and third party ownership. A preliminary version of this paper circulated with the title \\Implicit Property Rights in a Theory of the

The paper is concerned with developing a production theory for the case when some inputs have nonlinear prices because the price depends on endogenous quality. This involves extending the notion of a cost function to the case where nonlinear prices are parameters of costs. After developing the appropriate theory, we apply our results to the case of coal-fired electric power generation where fuel quality depends on sulfur and ash impurities. Environmental regulations induce a negative value on sulfur whereas ash impurities degrade performance and thus reduce production possibilities. A number of empirical results emerge, including significant rates of technological change that are sulfur and ash saving though capital using. This change may explain in part the recent drop in the price of sulfur allowances in the United States

This paper numerically investigates the significance of rents for both the welfare costs and the optimal design of commodity taxes using a general-equilibrium model calibrated to 1986 Canadian data. In the data we use, Ricardian rents are concentrated in agriculture and utilities, with market structure rents concentrated in manufacturing. Different types of rents have different implications for the welfare cost of taxes, and hence also for appropriate tax design. Ricardian rents lower the cost of taxes; rents supported by imperfect competition (with no free entry) raise the cost of taxes; rents supported by regulation generate rent-seeking costs, and if taxed improve resource allocation. Model results show a markedly nonuniform optimal tax structure, and a substantial influence of the treatment of rents on the pattern of optimal tax rates by commodity