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The impacts of regulating price in the pharmaceutical industry on industrial research and product development are evaluated using a micro-simulation model. It was found that reducing prices in U.S. pharmaceutical companies by 40-50% will result in 30% to 60% decline in research and development activities. The effects of reforms in price policies on private companies' incentives are investigated.

An analysis of the pricing distortions under price cap regulations (PCR) combined with a rate of return regulation (RORR) when companies are using non-linear tariffs with a universal service obligation in UK is offered. Additional information on the PC/RORR mechanism is included.

The welfare implications of price-cap regulation of multi-product monopolies were investigated. A mathematical model that establishes a price index with fixed weights was utilized to analyze Laspeyres regulation in which the regulator sets the productivity growth factor to take away a firm's expected rents without knowing the actual marginal costs. Results showed that a tight cap coupled with a weak correlation between the weights in the price index and the optimal ones can result in welfare below the unregulated level.

This article uses a multi-market agricultural pricing model to analyse the impact of the World Bank's three structural adjustment loans (SALs) to Malawi on the smallholder agricultural sector. Three price policy scenarios are simulated on the model representing zero, partial and full compliance with the Bank's SAL price policy conditionality. These scenarios are analysed in terms of their impact on: the government budget; smallholder real incomes; maize production; exportable cash crop production; and the balance of payments. Critiques of the Bank's programme and the government and Bank bargaining strategies are assessed in the light of the modelling results., I. INTRODUCTION Since the early 1980s the World Bank has supported structural adjustment programmes in a large number of developing countries. Such programmes consist of loans to support the balance [...]

A model is developed to examine the development of the 'quasifundamental' equilibria, the condition wherein price level and inflation rate are positively correlated with a 'fundamental' random variable. The model shows that in the quasifundamental equilibria, inflation rate is shown to be excessively variable both in quantitative and welfare-based variability measures. The utility of the quasifundamental equilibria model is in its ability to explain the implications of small deviations from the monetary steady state, which may affect its dynamic stability.

We study a macroeconomic model where stabilization problems arise as the result of a dynamic game of income distribution between capitalists and workers. The two agents control the supply sides of the goods and labor markets, respectively, using price changes as strategic variables, and a static fix-price model with money, labor and one macro-commodity to correctly predict the behaviour of the economy at each instant of time. The resulting medium-run price dynamics is consistent with major stylized facts on business cycles, it accounts for an empirical regularity that has been left unexplained by other models, and suggests a new relationship between the functional income distribution and the economy's sensitivity to shocks. Keywords: Fix-price; Price dynamics; Imperfect competition

The interaction between business firms during price regulation is found to be marked with cooperation, while competition is observed to increase after deregulation of prices. Two models which represent the regulated price and deregulated price markets are used in the process of determining the interaction between firms before and after price liberalization. An application to the Portuguese automobile-insurance market is also presented.