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This paper looks at the changing nature of regulation making with a special emphasis on the role that economists should play. It focuses specifically on the processes used to develop regulations. It argues that the traditional process for regulation making is breaking down and that the quality of regulation will decline if processes do not adapt to the changing environment. In addition to their traditional work of comparing regulatory instruments and calculating their benefits and costs, economists can play an important role by serving as strategists to help the public interest win in the strategic game of regulation making. [ABSTRACT FROM AUTHOR]

This paper studies the determination of exchange market transaction costs. Using a large data set including seven currencies, it provides empirical support for the theoretical prediction of a positive relationship between the level of uncertainty regarding future prices and current transaction costs. In contrast to most previous work, it considers explicitly the problem of omitted transactions volume, showing that while estimators are less efficient and potentially inconsistent in the absence of the unavailable variable, the direction of potential coefficient bias is such that hypothesis tests regarding the importance of uncertainty are rendered more conservative. [ABSTRACT FROM AUTHOR]