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Executive and regulatory agencies are decentralized state organizations that implement policies. When the law clearly defines the policy, we have a state policy; when it leaves the precise definition to the incumbent administration, we have a government policy. Regulatory agencies are supposed to execute state policies and be more autonomous from the administration, whereas executive agencies will be less autonomous politically but equally independent in administrative terms. Policies introduced by executive agencies are supposed to change the moment that the opposition political party or political coalition wins an election and a new administration begins, whereas the policies introduced by regulatory policies do not change so easily. Government policies may be changed either by the parliament or by the executive, whereas state policies may be changed only by the parliament. Executive agencies are supposed to have administrative autonomy, regulatory agencies, decision autonomy, but policies are not or should not be their responsibility.

Semimartingales of the type described in the previous chapter are used as modeling tools in a number of applications including the study of Internet packet flow, turbulence and other meteorological studies, genome analysis, physiology and other biological studies, particle modeling and finance. This chapter focuses on the specific characteristics of high-frequency financial data that distinguish them from other, more standard, time series data. Topics covered include mechanisms for price determination, high-frequency data distinctive characteristics, models for market microstructure noise, and strategies to mitigate the impact of noise.

This chapter provides a detailed examination of pharmaceutical pricing strategies in the United States. It points out that pharmaceutical expenditure as a share of total healthcare spending has historically been quite low in comparison to that of hospitalization and physician services. It identifies several common measures of pharmaceutical prices, and highlights the difference in conclusions reached based on different measures. It offers a critical review of several models used to explain pharmaceutical price behavior, which are grouped into three major categories: market structure models, R&D cost-based models, and product quality or value based models. The chapter concludes that prices of brand-name drugs in the United States are largely driven by product quality attributes, not cost of R&D. Lastly, the chapter examines the impact of generic entry on price.

Chapter 8 argues that power relations in soyabean markets are structured around norms of quality and who gets to determine the quality of a farmer’s crop. It suggests that focusing on the question of quality leads to different ways of visualising empowerment of farmers. New private market institutions like the choupals excluded the producers of poorest quality. However, unlike in other crops and markets, the choupals even gave short shrift to producers of excellent-quality soyabean. This outcome was a result of the way norms of quality structured the soyabean market. It was only those who produced average quality soyabean who could, at times, obtain a higher price at the choupals. Ironically, the norms of quality in soyabean and the nature of the plant itself made it possible for even poor farmers to obtain very good quality soyabean. Thus, unlike other crops, growing soyabean itself empowered poor farmers in the marketplace.

This chapter examines the ideas emerging at the end of the mercantilist era in France that served and celebrated agriculture, the diversely productive farms, rather than merchants and manufacturers. As mercantilist era came to a close, a combination of economic, political and intellectual forces set France ideologically apart from the rest of Europe. Merchant capitalism, an artisan class, and factory establishments had also appeared in France. Paris had become a city of merchants and their suppliers and workmen. Agriculture in France was more than an occupation; it was a way of life. The chapter considers the emergence of a group who called themselves Physiocrats or Les Économistes in France during the period in question, focusing on their views regarding the concepts of natural law and the produit net, mercantilism, class structure, and price determination.

Chapter 8 concludes the text with methodical remarks. It defends key assumptions made in the main text and compares them, to the extent they deviate, with more conventional premises. The chapter starts with a comparison of adaptive versus rational expectations. Thereafter, it contrasts infinite planning horizons, finite planning horizons, and overlapping generations models. The third section, which is devoted to modeling money, discusses money-in-the-utility, the transaction costs approach, and more recent theories that derive money demand from a microeconomic framework. The forth section shows that assuming a highly elastic labor supply is empirically unconvincing, whereas a constant labor supply simplifies the model greatly and appears as a reasonable approximation. The final section contrasts behavioral and choice theoretic approaches to price setting.

This chapter uses a dialogue between an ‘inquisitive student’ and an ‘economics teacher’ to expose a fundamental problem with how economics is taught at the introductory level. It illustrates the need to address the questions of equilibrium stability (does an equilibrium return if disturbed) and methodological individualism (the requirement that in an explanation of social events, ‘things don’t decide; only people do’). It also illustrates the inadequacy of what is taught in beginning economics classes. Specifically, if one has to assume the presence of an equilibrium to make any policy point, the validity of the point is always open to the criticism that it might not correspond to reality.