stylized facts and stylized illusions inflation and productivity revisited recent estimates of a negative empirical relationship between inflation and the rate of growth of productivity provide a strong case for vigorous anti inflationary policy this paper tests the robustness of this evidence using long quarterly and annual datasets for four countries canada united states united kingdom west germany our results from cointegration and other time series tests show no evidence for any connection between inflation and the level of productivity we do find a strong connection between inflation and productivity growth but it is so internally inconsistent as to be incredible the best explanation is that it is accounted for entirely by statistical bias from attempting to cointegrate stationary and non stationary variables

productivity growth scale economies and the schumpeterian hypothesis the schumpeterian hypothesis is usually interpreted as implying 1 a positive relationship between innovation and monopoly power with the concomitant above normal profits or 2 large firms are more than proportionately more innovative than small firms 6 22 empirical tests of the latter version of the schumpeterian hypothesis have traditionally examined the relationship between some measure of innovative activity and firm size innovative activity has been measured using innovative inputs such as r d expenditures or the employment of scientific and engineering personnel or innovative outputs as represented by the number of patents significant innovations or sales of new products the shortcomings of each of these as a proxy for innovative activity has been discussed extensively in the literature studies by phillips 10 stigler 13 carter and williams 3 weiss 15 allen 1 bock and farkas 2 greer and rhoades 4 kendrick and grossman 7 sveikauskas and sveikauskas 14 and scherer 11 have employed the growth rate of productivity either labor or total factor as a measure of innovative activity in empirical tests of the schumpeterian hypothesis this variable serves as a proxy for the rate of technical change and is particularly appropriate as a measure of dynamic efficiency in industries such as transportation primary metals utility services etc where the emphasis is on process and not product innovations as noted by kamien and schwartz 6 productivity may grow over time as a result of i shifts in the production function associated with technical change or ii increases in productivity arising from economies of scale this study demonstrates that inclusion of the scale effect in estimates of productivity growth imparts a downward bias in the relationship between firm size and dynamic efficiency which may lead to an inappropriate rejection of the schumpeterian hypothesis the empirical implications of this bias are illustrated using data from a sample of electric utilities operating in the u s during the period 1961 73

evaluating the impacts of real time pricing on the usage of wind generation one of the impediments to large scale use of wind generation within power systems is its nondispatchability and variable and uncertain real time availability operating constraints on conventional generators such as minimum generation points forbidden zones and ramping limits as well as system constraints such as power flow limits and ancillary service requirements may force a system operator to curtail wind generation in order to ensure feasibility furthermore the pattern of wind availability and electricity demand may not allow wind generation to be fully utilized in all hours one solution to these issues which could reduce these inflexibilities is the use of real time pricing rtp tariffs which can both smooth out the diurnal load pattern in order to reduce the impact of binding unit operating and system constraints on wind utilization and allow demand to increase in response to the availability of costless wind generation we use and analyze a detailed unit commitment model of the texas power system with different estimates of demand elasticities to demonstrate the potential increases in wind generation from implementing rtp

the employment effects of shorter working hours an application to japanese data this paper applies a simple model of hours employment and earnings to japanese manufacturing data and shows that a reduction in the number of standard hours is likely to increase overtime and reduce employment these findings are in line with recent theoretical developments and in contrast to the predictions of traditional analysis of hours and employment adjustment this difference is shown to be due to the treatment of the wage rate copyright 1989 by the london school of economics and political science

economic growth and development towards a catchup model we develop a model for economic growth applicable to a group of countries constituting around half of the gross global production that have been consistently catching up to the us since 1960 or so this group can be termed the convergence club the model has a theoretical basis developed in other publications cited but the present work is essentially empirical it demonstrates that there is a very strong correlation between catchup growth with respect to the us and an energy proxy ep the energy proxy that works best is a linear combination of domestic electric power consumption petroleum oil consumption per capita compared to the us levels the results presented here do not constitute a theory of growth but they are consistent with theory presented elsewhere on a practical level we argue that consistent catchup trends over the past 40 years can safely be extrapolated for a few more decades for scenario construction purposes we also believe that the observed catchup trends can be regarded as potential mid term or long term growth trajectories for transition economies and others that have recently been adversely affected by conflict or mismanagement

stochastic modelling of renewable energy sources from operators point of view a survey abstract high penetration of renewable energy sources especially weather dependent sources has increased the power systems uncertainties for any analysis in power systems such as planning and operation it is essential to confront the stochastic nature of these sources in order to get much more precise results since operators need proper strategies and methods to decline negative effects of the stochastic behaviour of renewable power generators such as total operation cost growth this paper provides a review of different state of the art approaches from the operator s viewpoint for handling the stochastic behaviour of renewable sources hence in this paper three different strategies are categorized for stochastic analysis of these sources the first strategy is mathematical modelling including stochastic dependency and independency multi dimensional dependence forecast and scenarios afterwards demand side management which is one of the other approaches for dealing with these uncertainties is investigated and different demand response programs and some methods to model them are presented finally the effect of different electricity market schemes and relevant optimization methods to mitigate the variations of renewable energy sources are discussed the study demonstrates that an operator should choose one or a combination of these three approaches based on its requirements

portfolio and contract design for demand response resources abstract electricity generation from renewable energy sources has seen significant growth in recent years to improve grid integration of these volatile energy resources demand side flexibility can be operationalized through intelligent scheduling of flexible electrical loads prior research has mainly focused on determining dispatch schedules for exogenously given portfolios of flexible electricity demand we expand on this literature by considering both contracting and dispatch of flexible loads to this end we formulate a demand aggregator s problem of designing and dispatching a portfolio of supply volatile renewable and conventional generators and demand inflexible base shiftable and curtailable load assets as a stochastic program to account for different contracting regimes we consider three market scenarios 1 a liquid flexibility market where the energy retailer is a price taker 2 an opaque market where non strategic customers will accept any individually rational contract offer and 3 a bi level model with strategic customers optimally self selecting into available contracts in the last case we also explore the effect of price discrimination versus uniform pricing we evaluate these models using empirical load and generation data contrary to conventional wisdom we find that flexibility contracting is not monotone increasing in renewable generation capacities our research also suggests that curtailable load is a closer substitute to supply flexibility than shiftable load finally we find that contracting of curtailing flexibility will be harder to implement if the aggregator has limited market power

most favored customer protection versus price discrimination over time how should a seller price capacity that has no salvage value to heterogeneous customers whose valuations are private information there are two periods and the seller cannot precommit to prices in the later period one option is price discrimination first price high then discount later if excess capacity remains by offering most favored customer protection the seller can charge more in advance but will leave capacity unsold with positive probability she favors the mfc protection when capacity is large and leans toward price discrimination when customers are more uncertain about the degree of excess demand in the first period

measuring productivity in economic growth since world war ii the improvement in the material well being of their citizens has been an explicit goal of nearly every nation associated with this goal is the challenge of how to utilize primary resources more efficiently to get more from what goes into the productive process success in this endeavor requires that the economic processes be in continual disequilibrium which gives rise to opportunities that decision makers can use to advan

local matching of flexible load in smart grids abstract today s power systems are experiencing a transition from primarily fossil fuel based generation toward greater shares of renewable energy sources it becomes increasingly costly to manage the resulting uncertainty and variability in power system operations solely through flexible generation assets incorporating demand side flexibility through appropriately designed incentive structures can add an additional lever to balance demand and supply based on a supply model using empirical wind generation data and a discrete model of flexible demand with temporal constraints we design and evaluate a local online market mechanism for matching flexible load and uncertain supply under this mechanism truthful reporting of flexibility is a dominant strategy for consumers reducing payments and increasing the likelihood of allocation suppliers during periods of scarce supply benefit from elevated critical value payments as a result of flexibility induced competition on the demand side we find that for a wide range of the key parameters supply capacity flexibility level the cost of ensuring incentive compatibility in a smart grid market relative to the welfare optimal matching is relatively small this suggests that local matching of demand and supply can be organized in a decentral manner in the presence of a sufficiently flexible demand side extending the stylized demand model to include complementary demand structures we demonstrate that decentral matching induces only minor efficiency losses if demand is sufficiently flexible furthermore by accounting for physical grid limitations we show that flexibility and grid capacity exhibit complementary characteristics

outage costs in chilean industry this paper estimates the cost of energy shortages to chilean industry the information was obtained from a sample survey carried out shortly after the 1989 electricity restriction the results obtained show that a 10 one month equiproportional restriction involves an average net outage cost of us 7 7 kw h 1 in the same scenario the average outage cost drops to us 3 2 kw h 1 when a limited selective restriction is applied we show that under current legislation the outage cost in fact lies between the costs of an equiproportional and a selective restriction however subtle modifications to legislation would make it possible to allocate the scarce supply efficiently

subsidy free pricing of interruptible service contracts abstract this article analyzes the issue of cross subsidy in the pricing structure of a utility offering interruptible service contracts utilizing a simple theoretical model in which available capacity is subject to random shocks we derive a set of sufficient conditions for the presence of subsidies in the pricing of priority service we find that low priority customers receive no subsidies whenever they pay prices in excess of variable costs a test for subsidies to high priority customers is derived that can be implemented utilizing available information extensions of the analysis are discussed

the impact of electric power on productivity according to the historical record the increased use of energy in general and electric power in particular stands as one of the key factors in productivity growth growth accountants however find little support for this view rejecting claims that the productivity slowdown can be attributed to the lower rate of growth of the energy input in us manufacturing in this study an attempt at reconciling the historical record with the empirical facts is made specifically the commonly used factor income shares in the relevant divisia input growth index are replaced by the estimated output input elasticities the latter attribute a considerably larger role to electric power than previous studies indicated these are then used to reevaluate the sources of growth in us manufacturing

market impacts of energy storage in a transmission constrained power system environmental concerns have motivated governments in the european union and elsewhere to set ambitious targets for generation from renewable energy re technologies and to offer subsidies for their adoption along with priority grid access however because re technologies like solar and wind power are intermittent their penetration places greater strain on existing conventional power plants that need to ramp up more often in turn energy storage technologies e g pumped hydro storage or compressed air storage are proposed to offset the intermittency of re technologies and to facilitate their integration into the grid we assess the economic and environmental consequences of storage via a complementarity model of a stylized western european power system with market power representation of the transmission grid and uncertainty in re output although storage helps to reduce congestion and ramping costs it may actually increase greenhouse gas emissions from conventional power plants in a perfectly competitive setting conversely strategic use of storage by producers renders it less effective at curbing both congestion and ramping costs while having no net overall impact on emissions

using yield management to shift demand when the peak time is unknown traditional peak load and stochastic peak load models assume firms have prior information about when peak demand occurs however price dispersion such as is typically used by firms practicing yield management can achieve some of the same efficient demand shifting even when the peak time is unknown equilibrium price dispersion arises because of stochastic demand and price rigidities but a previously unexplored benefit of price dispersion is its ability to reduce equilibrium capacity costs through demand shifting the model also suggests how yield management now more commonly called revenue management might actually benefit business travellers contrary to the popular prejudice

work sharing employment and wages the paper analyzes the effects of a reduction in working time on wages and employment with a monopoly union in general it is not clear in which directions these variables move but if employment and working time are perfect substitutes the effects are related to how working time has been determined initially the wage increases if initial working time is smaller than or equal to the trade union optimum whereas the result is unclear when it is larger in this case it is never optimal for a trade union to reduce both the wage and working time in response to a recessionary supply shock the analysis may help to explain varying attitudes towards work sharing in different countries

a theory of monetary exchange the transactions cost for alternative exchange mechanisms for the household exchange problem can be characterized by the computational complexity of the exchange process the computational complexity for any exchange mechanism is at least nh where n is the number of goods and h is the number of households imposing the conditions of conservation nonnegativity and quid pro quo results in a command exchange mechanism whose computational complexity is nh multiparty barter exchange formalized using graph theory has computational complexity

price leadership and welfare losses in u s manufacturing reply a model of price leadership is used to estimate the welfare losses dueto monopoly in u s manufacturing given that the leaders behave independently an hypothesis confirmed empirically the deadweight lossis estimated at 0 114 percent of gnp based on a sample of 445 four digit industries this estimate lends strong support to arnold c harberger s finding of thirty years ago copyright 1986 by american economic association

scenario reduction for futures market trading in electricity markets to make informed decisions in futures markets of electric energy stochastic programming models are commonly used such models treat stochastic processes via a set of scenarios which are plausible realizations throughout the decision making horizon of the stochastic processes the number of scenarios needed to accurately represent the uncertainty involved is generally large which may render the associated stochastic programming problem intractable hence scenario reduction techniques are needed to trim down the number of scenarios while keeping most of the stochastic information embedded in such scenarios this paper proposes a novel scenario reduction procedure that advantageously compares with existing ones for electricity market problems tackled via two stage stochastic programming

the incidence of classified property taxes in a three sector model with an imperfectly mobile population abstract this paper analyzes the incidence of a classified property tax imposing different effective tax rates on residential commercial and industrial property as compared to a uniform property tax taxing capital and land in all sectors at the same rate our model includes three sectors commercial industrial and residential and three factors of production land labor and capital capital is assumed to be perfectly mobile but we consider varying degrees of labor mobility allowing the possibility that part of a classified property tax may be shifted to workers through lower wages

customer satisfaction productivity and profitability differences between goods and services there is widespread belief that firms should pursue superiority in both customer satisfaction and productivity however there is reason to believe these two goals are not always compatible if a firm improves productivity by downsizing it may achieve an increase in productivity in the short term but future profitability may be threatened if customer satisfaction is highly dependent on the efforts of personnel if so there are potential tradeoffs between customer satisfaction and productivity for industries as diverse as airlines banking education hotels and restaurants managers in these types of service industries as well as goods industries in which the service component is increasing need to understand whether or not this is the case for example if efforts to improve productivity can actually harm customer satisfaction and vice versa the downsizing of u s and european companies should be viewed with concern it follows that developing a better understanding of how customer satisfaction and productivity relate to one another is of substantial and growing importance especially in light of expected continued growth in services throughout the world economy the objective of this paper is to investigate whether there are conditions under which there are tradeoffs between customer satisfaction and productivity a review of the literature reveals two conflicting viewpoints one school of thought argues that customer satisfaction and productivity are compatible as improvements in customer satisfaction can decrease the time andeffort devoted to handling returns rework warranties and complaint management while at the same time lowering the cost of making future transactions the second argues that increasing customer satisfaction should increase costs as doing so often requires efforts to improve product attributes or overall product design a conceptual framework useful in resolving these contradictory viewpoints is developed the framework serves in turn as a basis for developing a theoretical model relating customer satisfaction and productivity the model predicts that customer satisfaction and productivity are less likely to be compatible when 1 customer satisfaction is relatively more dependent on customization the degree to which the firm s offering is customized to meet heterogeneous customers needs as opposed to standardization the degree to which the firm s offering is reliable standardized and free from deficiencies and 2 when it is difficult costly to provide high levels of both customization and standardization simultaneously to move forward from the model s propositions to the development of testable hypotheses we argue that services are more likely than goods to have the preceding characteristics hence tradeoffs between customer satisfaction and productivity should be more prevalent for services than for goods although this classification is not precise many services are standardizable and many goods have a service component it has the advantage of allowing an initial test of the propositions the empirical work employs a database matching customer based measures of firm performance with traditional measures of business performance such as productivity and return on investment roi the central feature of this database is the set of customer satisfaction indices provided by the swedish customer satisfaction barometer scsb the scsb provides a uniform set of comparable customer based firm performance measures and offers a unique opportunity to test the study s hypotheses the findings indicate that the association between changes in customer satisfaction and changes in productivity is positive for goods but negative for services in addition while both customer satisfaction and productivity are positively associated with roi for goods and services the interaction between the two is positive for goods but significantly less so for services taken together the findings suggest support for the contention that tradeoffs are more likely for services hence simultaneous attempts to increase both customer satisfaction and productivity are likely to be more challenging in such industries of course this does not imply that such firms should not seek improvements in both productivity and customer satisfaction for example appropriate applications of information technology may improve both customer satisfaction and productivity simultaneously the findings should provide motivation for future research concerning the nature of customer satisfaction and productivity as well as appropriate strategy and tactics for each one it is worth emphasizing that this is an issue that is not only important today but certainly will become even more important in the future as the growth of services continues and world markets become increasingly competitive the importance of customer satisfaction will also increase to compete in such a world firms must strike the right balance between their efforts to compete efficiently and their efforts to compete effectively

price leadership and dynamic aspects of oligopoly in u s manufacturing this study which covers a sample of 314 four digit industries taken from an exhaustive set of 450 four digit industries shows that increases in concentration associated with rising productivity occur mainly in low concentration industries while decreases in concentration associated with rising productivity occur mainly in high concentration industries the empirical results of this study indirectly lend support to a plausible hypothesis that a small group of firms makes a big impact on the productivity of an initially unconcentrated industry and thereby concentrates it later the small firms imitate the now big firms and concentration goes down while productivity keeps rising

markets and pricing for interruptible electric power a market is proposed for interruptible or callable forward contracts for electric power in which the consumer grants the power supplier the right to interrupt a given unit of load in return for a price discount the callable forward contracts are traded continuously until the time of use this allows recourse for those customers with uncertain demand while risk averse consumers can minimize their price risk by purchasing early callable forward contracts are simple in form and can be directly incorporated into the utility s economic dispatch procedure

productivity in the united states trends and cycles productivity growth in the us has taken a sharp downturn in recent years two experts provide a new body of comparative data on productivity since 1948 by major sector and industry the book analyzes 20 industries to highlight trends and fluctuations in productivity and to provide a better context for the discussion of policy options the authors set forth the causes of productivity advances based on growth accounting for the business economy as a whole they detail interindustry regressions with particular reference to the productivity slowdown since 1966 they look at both the traditional measure of productivity labor output per hour and the more recently developed measure of total factor productivity which takes into account capital as well as labor inputs the quarterly and annual data are used to relate changes to other basic variables such as factor prices unit costs and product prices an appendix presents data for 35 industries 42 references 8 figures 30 tables

revenue implications of money creation under leviathan most governments possess a monopoly franchise in the creation of money economists provide an analytical justification for this institutional arrangement either in terms of the use of monetary aggregates for macro economic stabilization or in terms of the alleged inability of competitive markets to generate tolerably efficient monetary results any complete case for the government s monetary monopoly must however depend on a comparison of market and political arrangements a comparison that requires predictions about how governments are likely to behave once a monopoly franchise is assigned similarly such predictions are crucial in evaluating restrictions that might be imposed on the government s exercise of its money creation power in designing a monetary constitution in the analysis of political arrangements the revenue implications of the money creation power are probably more significant than considerations of either macro economic stability or optimality in the money supply although those revenue implications are incidental to demonstrating the nature of market failure in monetary arrangements they are fundamental in understanding how the government might exploit a monopoly in money creation once granted our interest in the revenue effects of money creation stems from a broader study of constitutional restrictions on the revenueraising authority of government see our book the power to create money is naturally encompassed in this restrictions on the revenue raising power must embody restrictions on the power to create money consequently the fiscal constitution has important implications for the monetary constitution in this paper we examine both the revenue implications of money creation and desirable consitutional restrictions on the money creation power within the context of a specific model of political processes

productivity and the embodiment of technical progress this survey of the issues involved in the embodiment hypothesis that technical change and productivity can be explained by changes in the quality of inputs into the production process treats the interrelationships of technical change and productivity presents some empirical findings on this subject and discusses some fundamental issues in further studies of embodiment topics covered include the nature of the embodiment hypothesis the vintage model of capital and embodiment in other inputs the use of the embodiment hypothesis to study productivity trends the embodiment hypothesis and the productivity slowdown in the 1970s and 1980s and potential future applications of the embodiment hypothesis

welfare implications of oligopoly in u s food manufacturing a statistical procedure is used to show that increased concentration in u s food manufacturing industries is associated with increased total input productivity a price leadership model is employed in order to estimate total welfare loss if an elasticity of 1 is assumed deadweight loss to society is estimated at 0 5 of food value if an elasticity of 0 5 is assumed total loss to consumers amounts to 6 11 of food value which is 10 billion in 1975 the increase in total factor productivity which is linked to concentration is roughly sufficient to offset the entire loss to consumers

interruptible electricity contracts from an electricity retailer s point of view valuation and optimal interruption we consider interruptible electricity contracts issued by an electricity retailer that allow for interruptions to electric service in exchange for either an overall reduction in the price of electricity delivered or for financial compensation at the time of interruption we provide a structural model to determine electricity prices based on stochastic models of supply and demand we use stochastic dynamic programming to value interruptible contracts from the point of view of an electricity retailer and describe the optimal interruption strategy we also demonstrate that structural models can be used to value contracts in competitive markets our numerical results indicate that in a deregulated market interruptible contracts can help alleviate supply problems associated with spikes of price and demand and that competition between retailers results in lower value and less frequent interruption

decomposing growth in revenues and costs into price quantity and total factor productivity contributions this article employs the superlative fisher and tornqvist indexes for exact decomposition of growth in nominal revenues and costs the findings confirm the well known result that these indexes very closely approximate each other implying that the mathematically simpler and computationally easier tornqvist is the more practicable index moreover this article s nominal growth decomposition yields all the results from the more common real growth decomposition and is also more informative for policy purposes application to the us agricultural sector during 1948 2001 shows that of the 3 31 average annual growth in revenues tfp growth contributed 1 90 percentage points pct pts growth in output prices added 1 43 pct pts while growth in input quantities contributed 0 02 pct pts i e fewer inputs therefore real output growth or revenue growth less output price growth was 1 88 pct pts revealing that tfp s 1 90 pct pts growth contribution was fully responsible for real output growth with

stochastic security constrained unit commitment this paper presents a stochastic model for the long term solution of security constrained unit commitment scuc the proposed approach could be used by vertically integrated utilities as well as the isos in electricity markets in this model random disturbances such as outages of generation units and transmission lines as well as load forecasting inaccuracies are modeled as scenario trees using the monte carlo simulation method for dual optimization coupling constraints among scenarios are relaxed and the optimization problem is decomposed into deterministic long term scuc subproblems for each deterministic long term scuc resource constraints represent fuel and emission constraints in the case of vertically integrated utilities and energy constraints in the case of electricity markets lagrangian relaxation is used to decompose subproblems with long term scuc into tractable short term mip based scuc subproblems without resource constraints accordingly penalty prices lagrangian multipliers are signals to coordinate the master problem and small scale subproblems computational requirements for solving scenario based optimization models depend on the number of scenarios in which the objective is to minimize the weighted average generation cost over the entire scenario tree in large scale applications the scenario reduction method is introduced for enhancing a tradeoff between calculation speed and accuracy of long term scuc solution numerical simulations indicate the effectiveness of the proposed approach for solving the stochastic security constrained unit commitment

real wage growth technical change and competition in the labor market the paper measures the rate of growth of average labor cost and the real wage for the twenty u s two digit manufacturing industries 1948 76 it is argued that these rates of growth give interesting information which other studies on the real wage ignore the results suggest that the gains from technical advance are shared equally across all labor markets consistent with the competitive paradigm a simple and appealing rationale for the observation that high growth industries show the slowest relative rate of growth of prices is also given t he general theory keynes 1936 unleashed many controversies one of the earliest and still topical controversy is the cyclical behavior of the real wage essentially the real wage employment debate has focussed on whether or not the demand schedule slopes downwards and there have been many studies on this topic producing a variety of conflicting findings a common feature of the real wage employment studies is to abstract away from the growth in the real wage that is bound to occur in a growing economy these studies are primarily concerned with deviations from trend or innovations in the real wage and the theme of this paper is that to ignore the growth in the real wage is to throw away valuable and interesting information this information on real wage growth tells us a great deal about competition in the labor market this study should be seen as being complementary rather than conflicting with the real wage employment studies the existence of a downward sloping demand curve for labor is after all not sufficient and probably not necessary for the functioning of competitive labor markets over the span of years 1948 76 i find that individual u s manufacturing industries record widely varying rates of productivity growth however these same industries tend to show a common rate of growth of the real wage this feature of productivity growth was emphasized by the late salter 1960 in his pathbreaking analysis of technical change he writes there is no tendency for above average increases in labour productivity to be accompanied by above average increases in earnings

working hours and productivity in swedish manufacturing the magnitude of the elasticity of output with regard to working hours is an important factor in the debate on working time despite some attempts at its estimation little is known about this elasticity and empirical studies have yielded contradictory results feldstein 1967 craine 1973 and leslie 1984 obtain an output elasticity with respect to working hours considerably above one which implies that shorter working hours reduce productivity on the other hand elasticities below one are reported in studies by malinvaud 1973 tatom 1980 leslie and wise 1980 hart and macgregor 1984 and aberg 1985 suggesting that shorter working hours increase labor productivity part of this discrepancy naturally reflects differences between the economies and sectors studied types of data and the methods applied the main objective of this study is to analyze the sensitivity of the magnitude of the elasticity of output with respect to working hours to different production function specifications along the lines suggested by hart and macgregor 1984

contract durations in the electricity market causal impact of 15 min trading on the epex spot market abstract the european power exchange epex introduced two new products in 2011 and 2014 which reduce the delivery duration of electricity from 1 h to 15 min intervals these changes to the market design aim to better reflect the intermittent power generation from renewable energy sources however little is known about trading in shorter intervals and its impact on the existing market as a remedy our evaluation first shows that the market has quickly adopted the new 15 min contracts second we estimate a bayesian structural time series which measures a causal decrease of electricity prices depending on the model specification our results indicate that the reduction can be as high as 28 for existing hourly contracts subsequent to the introduction of 15 min trading third the use of 15 min contracts coincides with intermittent power generation as it incentivizes renewable energy providers to offer additional electricity altogether our findings suggest that 15 min trading is used to balance the intra hour volatility of renewable energy sources consequently this presents a blueprint for policy makers who can attain similar price reductions and larger feed ins from renewable energy sources without direct costs in all countries with high shares of renewable energy sources

declining productivity revisited secular trends or cyclical losses dickens 1982 argued that the productivity slowdown since the mid 1960s is cyclical and not a long term trend this letter tests the robustness of dickens conclusion specifically with respect to labor productivity

hours layoffs and unemployment insurance funding theory and practice in an international perspective the strikingly different behaviour of important economic aggregates in the united states and other industrial countries has received surprisingly little attention from economists among recent exceptions however gordon i 982 has shown that wages and hours of work are much more flexible in the united kingdom and japan than in the united states such relative hours variability is confirmed in a macro analysis by capdevielle and alvarez i98i and at micro level by sengenberger and kohler i982 the latter authors are concerned with labour market adjustment within the u s and west german automobile industries between i 97 i and i 980 estimates of the german workeroutput elasticity are found to be less than half that of the united states while the german hours elasticity is twice the united states figure at the national aggregate level capdevielle and alvarez also reveal much greater employment variability in the united states than in most other oecd countries in the years following the i973 74 opec supply shock much in line with these employment hours observations moy and sorrentino i98i argue that after

a two stage mechanism to improve electricity rationing electricity cannot be stored economically and must be generated on demand because electricity demand is subject to cyclical and random fluctuations an equilibrium price would change constantly and spot pricing would generate substantial information and transactions costs in the absence of spot prices the utility must install enough capacity to meet peak demand with a given probability and design a rationing plan for when the reserve margin proves inadequate to avoid building new generation facilities electric utilities have devised innovative rationing plans these plans referred to as load management programs allow the utility to curtail loads of a pre determined group of consumers interruptible curtailable i c programs are among the most popular much of the analysis of these mechanisms has focused on the efficiency losses due to the absence of complete contingent contracts because transaction costs prevent the implementation of contracts which fully represent the states of nature there is inefficiency in allocation at the time of interruption there exists a second type of inefficiency which has largely been ignored a central hypothesis underlying all of these models is that the relative order or ranking of consumers willingness to pay remains unchanged throughout the contract period this is a fairly restrictive assumption in much the same way that prohibitive transaction costs preclude the use of complete contingent contracts these costs also make it necessary that i c contracts have relatively long durations say 3 5 years within a long contract period it seems unrealistic to assume invariance in the ordering of consumers willingness to pay thus it becomes impossible to achieve an efficient allocation at the time of interruption without some revelation by consumers of their willingness to pay at the time of interruption

work sharing and overtime this paper deals with the employment effects of reduced working time when firms endogenous response of overtime is considered the analysis distinguishes between fixed and profit maximizing levels of output as well as between interior and corner solutions it is shown that under plausible assumptions a reduction in working time is quite likely to be counterproductive as an employment promoting measure i introduction a reduction in working time has been proposed as a method of increasing employment through work sharing such proposals however often seem to build on an oversimplified view of the world where little consideration is given to various possible repercussions most economists therefore seem rather sceptical towards such proposals for more or less critical discussions see e g hart sloane 1979 charpin 1984 brunstad holm 1984 calmfors 1985 hoel 1986 1987 hoel vale 1986 and dreze 1987 none of these papers however takes into account that actual working time will differ from normal working time to the extent that there is overtime work the aim of this paper is to analyse how endogenous responses of overtime may affect the outcome with respect to employment of reducing the normal working time although overtime work currently accounts for only a minor proportion of total working time around three per cent in sweden we believe this to be an important channel since a major reduction in working time will represent a nonmarginal change which is likely to produce significant changes in established practices our results add to the doubts that a reduction in working time increases employment there has been some recent work on the relationship between normal working time and overtime cf hart 1984 fitzroy hart 1985

allocating uncertain and unresponsive resources an experimental approach we identify an important class of economic problems that arise naturally in several applications the allocation of multiple resources when there are uncertainties in demand or supply unresponsive supplies no inventories and fixed capacities and significant demand indivisibilities rigidities examples of such problems include scheduling job shops airports or supercomputers zero inventory planning and the allocation and pricing of nasa s planned space station using experimental methods we show that the two most common organizations used to deal with this problem markets and administrative procedures can perform at very low efficiencies 60 65 efficiency in a seemingly robust example thus there is a need to design new mechanisms that more efficiently allocate resources in these environments we develop and analyze two mechanisms that arise naturally from auctions used to allocate single dimensional goods these new mechanisms involve computer assisted coordination made possible by the existence of networked computers both mechanisms significantly improve on the performance of administrative and market procedures

multilevel demand subscription pricing for electric power abstract this paper investigates a general demand subscription pricing policy for electric power service ie a menu of service contracts for assigning different interruption probabilities and prices to different load levels this interruptibility feature is combined with a nonlinear energy price schedule to encourage load flattening we derive a customer value model and a weighted sum objective function for the supplier and consumers for selecting optimal price structures of this type the general form of the optimal price policy is derived and discussed and the implementation methodology is outlined an illustrative example is solved in detail

priority service pricing investment and market organization tingent forward delivery contracts offered by a seller each customer s selection of one contract from the menu determines the customer s service order or priority in each contingency the seller rations supplies by serving customers in order of their selected priorities until the supply is exhausted or all customers are served various forms of priority service are widely

information technology and the world economy this paper addresses the impact of investment in information technology it on the recent resurgence of world economic growth we describe the growth of the world economy seven regions and 14 major economies during the period 1989 2003 we allocate the growth of world output between input growth and productivity and find surprisingly that input growth greatly predominates the contributions of it investment have increased in all regions but especially in industrialized economies and developing asia differences in per capita output are explained by differences in per capita input rather than by variations in productivity

efficient and competitive rationing abstract the contracts that interest us here are called priority service contracts the salient feature of such contracts is that they specify each customer s priority in obtaining service that is they specify the tank order in which a customer is served out of the available supply until all customers are served or supply is exhausted such contracts essentially establish queues for customers in section 1 the author provides some background about priority service section 2 formulates a basic model and offer several illustrations also describes two main examples that motivate the theoretical development section 3 derives some key results that show how the prices of priority service contracts are designed to induce customers to self select efficient service orders in section 4 the author discusses various ways that state enterprises can organize markets that implement priority service efficiently in section 5 we study the operation of competitive markets for priority service section 6 concludes with some summary remarks two themes are emphasized one is that a state enterprise can promote substantial efficiency gains by substituting priority service for absent spot markets the other is that oligopolistic firms may have insufficient incentives to offer efficient product diversity consequently allocative efficiency depends on entry of numerous firms even so dispersal of supplies among many firms can prevent productive efficiency when there are advantages from pooling supplies

labor utilization and nonwage labor costs in a disequilibrium macro framework the literature on labor utilization and nonwage labor costs is extended to incorporate recent approaches to macroeconomic disequilibrium modeling based on the smoothing by aggregation principle this leads to a reformulation of the basic sneessens dreze type model by treating employment and working hours as separate inputs the inclusion of nonwage labor costs serves a double purpose first they represent a restriction in the profit maximizing process and second they serve as a proxy for the fixity of labor the results differ substantially from simulation studies that disregard the utilization of labor and the nonlinear structure of labor costs

a laissez faire approach to monetary stability this paper develops some diverse hints for a new monetary system offered separately by fischer black eugene fama and robert e hall for reasons that will become evident though we should perhaps say payments system instead of monetary system none of the economists mentioned has actually proposed the particular system set forth here nor examined all its properties and we call it the bfh system not to implicate them but only to give credit for some component ideas and to have a convenient label l regardless of who if anyone may actually advocate the system contemplating it is instructive it illuminates by contrast some characteristics of our existing and recent systems

economic analysis of transmission expansion planning with price responsive demand and quadratic losses by successive lp the growth of demand response programs and renewable generation is changing the economics of transmission planners and regulators require tools to address the implications of possible technology policy and economic developments for the optimal configuration of transmission grids we propose a model for economic evaluation and optimization of inter regional transmission expansion as well as the optimal response of generators investments to locational incentives that accounts for kirchhoff s laws and three important nonlinearities the first is consumer response to energy prices modeled using elastic demand functions the second is resistance losses the third is the product of line susceptance and flows in the linearized dc load flow model we develop a practical method combining successive linear programming with gauss seidel iteration to co optimize ac and dc transmission and generation capacities in a linearized dc network while considering hundreds of hourly realizations of renewable supply and load we test our approach for a european electricity market model including 33 countries the examples indicate that demand response can be a valuable resource that can significantly affect the economics location and amounts of transmission and generation investments further representing losses and kirchhoff s laws is also important in transmission policy analyses

employment and allocation effects of reducing the length of the workday the paper analyses the effects of reducing the length of the workday in a situation with classical unemployment owing to a fixed hourly real wage rate the length of the workday is assumed to enter the production functions of the two sectors manufacturing and services differently employment will increase in the manufacturing sector while the employment effect in the service sector is ambiguous it is possible for employment in the service sector to decline so much that total employment also goes down if the workday is shortened in the manufacturing sector alone employment will rise in this sector and decline in the service sector the effect on total employment is ambiguous with a specific case of mixed classical and keynesian unemployment employment in the manufacturing sector will be unaffected by changes in the length of the workday while a reduction in the length of the workday will reduce employment in the service sector if the income elasticity for services is not less than one

reliability differentiated real time pricing of electricity optimal resource planning and power dispatch models from a societal welfare point of view imply an optimal pricing policy which is referred to here as reliability differentiated real time pricing or in short reliability differentiated pricing this pricing scheme combines real time pricing and priority pricing with reliability differentiation based on consumer outage costs this pricing policy is analyzed the model used in the analysis is developed with particular emphasis on consumer behavior and welfare effects the implications of the model for the pricing of spinning reserve and firm capacity as well as for revenue reconciliation are examined it is concluded that such a pricing scheme will in general result in greater attainable welfare than either the real time pricing or priority pricing paradigms moreover it results in the maximum attainable welfare for the system with revenue reconciliation and provides an optimal pricing scheme for spinning revenue and firm capacity

effects of shorter hours on employment in disequilibrium models abstract in this paper the employment effects of a wage compensated and non compensated reduction of standard working time are examined in the context of disequilibrium theory in disequilibrium models with exogenous working time noncompensated shorter standard hours increase employment in both regimes keynesian and classical unemployment wage compensation reduces the employment response at a regime dependent rate if working time is endogenized by taking into account overtime effects the employment response of shorter hours is positive in keynesian unemployment and negative in classical unemployment wage compensation increases the employment effect in the keynesian regime and decreases it in the classical regime a model is presented that allows for hours as well as capital stock adjustment and integrates non competitive price setting

motivating wage structures the traditional textbook model of labor supply treats the wage structure facing the individual utility maximizer as more or less exogenously given this paper modifies this crucial assumption and argues that it provides some interesting further detail on the labor supply model the employer is viewed as a labor cost minimizer subject to an output constraint and the additional constraint that each individual must receive a certain level of utility this gives an optimal demand for hours the employer is then assumed to devise a wage structure such that the individual employee willingly supplies exactly those number of hours that the employer demands it is argued that this is a more logical way of viewing labor supply compared to the traditional approach which effectively ignores the fact that it is employers who set hours of work a simple and appealing formula is developed which relates the optimal wage structure to the relative productivities of hours and men at the margin it is shown that the optimal wage structure depends only on the employer s technology finally labor taxes are integrated into the framework which demonstrates that the underlying ideas are little affected by this complication

multi product pricing for electric power abstract this paper describes methods for determining the prices for a discrete set of interrelated products offered by a single supplier each product has a fixed marginal rate per unit the demand for each product depends upon the price levels of all the products and the supplier s cost function depends upon the demands for all the products for specific demand function forms methods are described for determining the prices that maximize a weighted sum of net revenue and consumer surplus

the complexity of exchange the computational complexity of two classes of market mechanisms is compared first the walrasian interpretation in which prices are centrally computed by an auctioneer recent results on the computational complexity are reviewed the non polynomial complexity of these algorithms makes walrasian general equilibrium an implausible conception second a decentralised picture of market processes is described involving concurrent exchange within transient coalitions of agents these processes feature price dispersion yield allocations that are not in the core modify the distribution of wealth are always stable but path dependent replacing the walrasian framing of markets requires substantial revision of conventional wisdom concerning markets

optimization based bidding strategies in the deregulated market with the deregulation of electric power systems market participants are facing an important task of bidding energy to an independent system operator iso this paper presents a model and a method for optimization based bidding and self scheduling where a utility bids part of its energy and self schedules the rest as in new england the model considers iso bid selections and uncertain bidding information of other market participants with appropriately simplified bidding and iso models closed form iso solutions are first obtained these solutions are then plugged into the utility s bidding and self scheduling model which is solved by using lagrangian relaxation testing results show that the method effectively solves the problem with reasonable amount of cpu time

worksharing and factor prices abstract the aspect of worksharing on which this paper concentrates concerns an increase in the firm s workforce offset by a reduction in average working hours emphasis is given to the effect of relative factor prices on worksharing within a model structure which includes the capital stock and worker productivity as endogenous inputs factor prices include all the main categories of wage and non wage labour payments as well as the user cost of capital special attention is given to the role of non wages both quasi fixed and variable an analysis of the effects of marginal employment subsidies on worksharing is also considered with reference to the french solidarity contracts

optional forward contracts for electric power markets this paper extends the idea of callable forward contracts which are potentially useful as demand side interruptible load contracts to their supply side analogues together these contracts allow market participants to take advantage of flexibility in generation or consumption to obtain a monetary benefit while simultaneously removing the risk of market price fluctuations this paper also considers the effects of strategic behavior on the part of market participants in their contract sales purchase decisions

seniority rules and productivity an empirical test the primary purpose of this paper is to test empirically the effect of labor quality on short run manufacturing productivity in doing so the study makes major advances in two areas for the first time a job tenure function is estimated and a time series of job tenure in manufacturing is developed this estimated tenure series empirically verifies the use of seniority rules in the firm worker employment relationship having generated a tenure series the authors then test whether tenure enhances productivity in manufacturing the results clearly indicate that seniority rules have a statistically significant positive impact on productivity and the pattern of the seniority rules is reminiscent of a model where human capital has a specific component copyright 1989 by the london school of economics and political science

wages and the intensity of labor effort efficiency wages versus compensating payments the distinction between efficiency wages and compensating payments is at best rather vague in both the theoretical and empirical literatures positing a relationship between wages and the intensity of labor effort while efficiency wages and compensating payments are both related to work intensity the mechanisms that generate these relationships are in each case quite distinct compensating payments exist in competitive labor markets to equalize overall compensation across identical workers with dissimilar working conditions workers who expend more labor effort must be paid more or they will seek employment elsewhere efficiency wages are employment rents paid by firms in order to ensure adequate labor effort these rents vary with the costs firms face in monitoring labor effort they cannot be competed away because without employment rents profit maximizing levels of work intensity would not be forthcoming in this paper we distinguish between the efficiency wage and compensating payments components in wage differences across workers and firms in the first section of the paper we use a theoretical model of optimal labor effort choice by workers and firms to make these two com

effects on unemployment of reduced working time in an economy where firms set wages the paper considers an economy where firms set wages balancing the direct benefit of low wages with the indirect cost of low wages relative to other firms leading to high quit rates and therefore high training costs reducing the institutionally given working time makes the importance of training costs increase thus making firms more concerned about keeping quit rates low the effect is increased unemployment as a consequence of reduced working time the effect on hourly and yearly wages is uncertain although increased hourly wages seem to be the most plausible case

educational expansion and economic output in the united states 1890 1969 a production function analysis our research analyzes the effect of educational expansion on economic output in the united states from 1890 to 1969 in a departure from the individual level inferences often used in prior research we use an aggregate production function framework to estimate directly educational effects on economic output net of labor and capital the two basic factors of production using aggregate time series analyses we find that expansion at the secondary and doctorate levels was positively related to economic output in the years since 1933 we do not however find consistent evidence for effects of these or other levels of schooling from 1890 to 1928 consequently while we have found that educational expansion has made contributions to economic output the effects of education are more limited and time specific than shown in previous studies

economic valuation of reserves in power systems with high penetration of wind power this paper proposes a methodology to determine the required level of spinning and nonspinning reserves in a power system with a high penetration of wind power the computation of the required reserve levels and their costs is achieved through a stochastic programming market clearing model spanning a daily time horizon this model considers the network constraints and takes into account the cost of both the load shedding and the wind spillage the methodology proposed is illustrated using an example and a realistic case study some conclusions are finally drawn

contributions of neoclassical economics to public utili iy analysis neoclassical economics the dominant economics paradigm has influenced and been influenced by developments in regulated industries we identify major theoretical and empirical accomplishments discuss the impactofthese accomplishmentsonpolicydevelopment andlist the channelsthrough which the impacts are madepossible we then discuss regulatorypolitics lack ofresearchperspective an overly narrow focus on economic efficiency and the academic profession as factors limiting the impact of neoclassical economics on public policy

the trade off between real wages and employment in an open economy belgium abstract the purpose of this paper is twofold first we discuss the nature and quantitative order of magnitude of the trade off between real wages and employment in the small open economy belgium second we draw policy conclusions from our positive analysis and compare income policies with alternative approaches to employment stimulation including shorter working hours and currency depreciation to study the trade off between real wages and employment we treat external balance as a binding constraint on demand management an exogenous increase in real wages affecting adversely the competitiveness of domestic producers on the export and import markets impairs external balance the impact of the wage increase on output and employment is evaluated through the reduction in domestic demand required to restore external balance at the empirical level we endeavour to evaluate separately the influence on exports and imports of domestic costs at unchanged capacity levels and of capacity levels themselves and we endeavour to evaluate the influence of real wages on capacity levels through scrapping and investment all evaluations rely on the foreign trade equations of econometric models of the belgian economy the conclusions from our empirical investigation are first that estimates of the trade off between real wages and employment in belgium are subject to considerable imprecision second that the short run elasticity of employment with respect to real wages keeping capacity constant is probably quite small like 0 2 and definitely less than unity in absolute value third that the corresponding medium run elasticity taking into account capacity adjustments is probably sizeable like 2 and definitely larger than unity in absolute value and fourth that exchange rate adjustments might not make too much difference in either the short run or the medium run turning to a discussion of policy we shall argue that these conclusions give support to a policy of constant real labour incomes of comprehensive efforts to redistribute work through shorter working hours or related schemes and of selective efforts to slow down capacity scrapping

equilibrium price dispersion under demand uncertainty the roles of costly capacity and market structure when capacity is costly and prices are set in advance firms facing uncertain demand will sell output at multiple prices and limit the quantity available at each price i show that the optimal price strategy of a monopolist and the unique pure strategy nash equilibria of oligopolists both exhibit intrafirm price dispersion moreover as the market becomes more competitive prices become more dispersed a pattern documented in the airline industry while generating similar predictions the model differs from the revenue management literature because it disregards market segmentation and fare restrictions that screen customers

towards an explanation of the productivity slowdown an acceleration deceleration hypothesis after two and a half decades of prosperous post war development western industrialised countries recently experienced a slowdown of economic growth and productivity advance together with an increase in the rates of inflation and unemployment in trying to explain this malaise we are looking at a diagnosis that could help us to identify early indicators of a future turnaround or some policy variables which deserve to be included in a therapeutic programme although we shall focus on what can be measured complying with the standards of the guild we shall not refrain from considering complex relationships which can be grasped only intuitively even if they include phenomena which lie beyond the limits of official statistics 2 the outcome may be soft economics but we find some consolation in the dictum that it is better to be vaguely right than to be precisely wrong

the productivity inflation nexus the case of the australian mining sector this paper examines the causal links between productivity growth and two price series given by domestic inflation and the price of mineral products in australia s mining sector for the period 1968 1969 to 1997 1998 the study also uses a stochastic translog cost frontier to generate improved estimates of total factor productivity tfp growth the results indicate negative unidirectional causality running from both price series to mining productivity growth regression analysis further shows that domestic inflation has a small but adverse effect on mining productivity growth thus providing some empirical support for australia s inflation first monetary policy at least with respect to the mining sector inflation in mineral price on the other hand has a greater negative effect on mining productivity growth via mineral export growth

monopoly price dispersion under demand uncertainty when a monopolist sets its price before its demand is known then it may set more than one price and limit the availability of its output at lower prices this article adds demand uncertainty and price rigidities to the standard model of monopoly pricing when there are two states of demand and the ex post monopoly price is greater when demand is high then the monopolist s optimal ex ante pricing strategy is to set two prices and limit purchases at the lower price

decentralized multi period economic dispatch for real time flexible demand management emerging smart grid enabling technologies will allow an unprecedented degree of observability and control at all levels in a power system combined with flexible demand and storage they could allow procuring energy at minimum cost and environmental impact that however presupposes real time coordination of demand of individual households and industries down at the distribution level with generation at the transmission level this is closely related with the balancing market economic dispatch ed problem which currently does not take into account distribution network constraints and flexible demand characteristics still assuming a suitably modified form of that problem was available due to both computational and communications requirements its centralized solution in its full detail would not be tractable while there is currently a wealth of literature dealing with distributed optimization applications in power systems it typically focuses on smaller parts of the overall energy management problem e g transmission area synchronization or electric vehicles management often without considering its full scale or establishing any association with energy market mechanisms the target of this paper is twofold 1 identify a flexible demand and distribution network inclusive formulation for ed and 2 propose a solution method

aggregator controlled ev charging in pay as bid reserve markets with strict delivery constraints electric vehicles evs similar to other types of flexible loads can be controlled to provide additional flexibility to power system operators which is needed to transition from primarily fossil fuel based electricity generation to more renewable generation existing electricity markets already provide economic incentives to offer flexibility so called aggregators in charge of controlling ev charging could take advantage of these incentives however random driving behavior and area specific market rules complicate the market participation of ev aggregators in energy and reserve markets the goal of this paper is to investigate the design and performance of a system that would enable ev aggregators to participate in wholesale electricity markets we consider a certain type of market environment which includes an intraday energy market and pay as bid reserve markets that require exact reserve delivery and have long operating intervals we therefore propose a novel approach for concurrent market participation that can deal with these constraints even when faced with highly uncertain reserve activation and ev behavior

large scale integration of deferrable demand and renewable energy sources we present a stochastic unit commitment model for assessing the impacts of the large scale integration of renewable energy sources and deferrable demand in power systems in terms of reserve requirements we analyze three demand response paradigms for assessing the benefits of demand flexibility the centralized co optimization of generation and demand by the system operator demand bids and the coupling of renewable resources with deferrable loads we motivate coupling as an alternative for overcoming the drawbacks of the two alternative demand response options and we present a dynamic programming algorithm for coordinating deferrable demand with renewable supply we present simulation results for a model of the western electricity coordinating council

strategic rate making in the context of dynamic ramsey pricing as a result of the public utilitie regulatory policies act of 1978 purpa state public utility commissions have begun to implement cost based rate setting procedures in order to rationalize energy choices made by utilities and utility customers this rationalization had been necessary in view of the increased competition characterizing the eletric utility industry taking these regulatory and competitive change as a point of departure we develop and implement an electricity rate setting model which is cost based which explicitly accounts for static and dynamic competitive pressures and which is welfare maximizing the model extends standard ramsey methods to include bothshort run andlong run price responses in the inverse elasticity rule we use the estimated model to evalute and design alternative rates our analysis takes a distincly strategic approach explicitly addressing competition from other fuels and the possibility of competitive bypass

strategic bidding in an energy brokerage this focus of this paper is to present a framework in which strategies may developed for the individual participants in an energy brokerage such a framework is expected to be important with the increasing interest in electricity market structures such as the energy brokerage that deregulation has produced to illustrate the process of strategic bidding a simple suboptimal bidding strategy is presented with the aid of a numerical example the bidding strategy must be suboptimal because of the amount of unknown information about the other bidders further tuning of this strategy will be required before application to realistic scenarios

patterns of state productivity growth in the u s farm sector linking state and aggregate models this article focuses on agricultural productivity growth at both sector and state levels it does so in a way that preserves the economic integrity of national and state production accounts a model accounting for interstate transactions in farm goods links sectorwide and state specific measures of total factor productivity growth an interesting conclusion is that the smooth persistently positive trend typically observed for farm sector productivity growth masks considerable variation across states and regions the results also indicate that farm sector productivity growth is wholly a function of productivity trends in the individual states interstate shifts in production activity and resource reallocations have had little impact

evaluation of market rules using a multi agent system method the california energy crisis in 2000 2001 showed what could happen to an electricity market if it did not go through a comprehensive and rigorous testing before its implementation due to the complexity of the market structure strategic interaction between the participants and the underlying physics it is difficult to fully evaluate the implications of potential changes to market rules this paper presents a flexible and integrative method to assess market designs through agent based modeling realistic simulation scenarios are constructed for evaluation of the proposed pjm like market power mitigation rules of the california electricity market simulation results show that in the absence of market power mitigation generation company genco agents facilitated by q learning are able to exploit the market flaws and make significantly higher profits relative to the competitive benchmark the incorporation of pjm like local market power mitigation rules is shown to be effective in suppressing the exercise of market power