 In Praise of (Some) Red Tape: A New Approach to RegulationGordon Menzies, Peter Dixon and Maureen Rimmer No 33, Working Paper Series from Economics Discipline Group, UTS Business School, University of Technology, Sydney Abstract: The costs of removing red tape include a lower chance of detecting recession-generating flaws in the financial system. What we call independent dimensions of regulation (IDRs) operate more or less independently to other groupings. If an IDR�s optimality is unknown, it may be risky to remove. Uncertainty thus implies that (some) red tape � i.e. a small amount of overregulation � is justified, in contrast to the Brainard (1967) principle that uncertainty dictates less policy activism. The long run GDP benefit of a 1% improvement in financial services productivity is 0.06% in our CGE model. These relatively modest gains reinforce our conclusion. Keywords: Banking; Regulation; Monitoring; Financial Crises; Independent dimension of regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:uts:ecowps:33 Access Statistics for this paper More papers in Working Paper Series from Economics Discipline Group, UTS Business School, University of Technology, Sydney PO Box 123, Broadway, NSW 2007, Australia. Contact information at EDIRC. |
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