equality employment and budgetary restraint the trilemma of the service economy this article presents an analysis of the postindustrial economy from a political economy perspective it identifies a set of specific distributional trade offs associated with the new role played by the services sector as the chief source of employment growth in advanced democracies over the last three decades it is argued that three core policy objectives budgetary restraint wage equality and expansion of employment constitute a political trilemma that allows only two of the goals to be successfully pursued at the same time using a combination of statistical and case oriented analysis the authors demonstrate the political and economic salience of the trilemma the distributional tensions inherent in each strategy to cope with it and the political institutional constraints under which these strategies are chosen

optimal electricity market for wind power abstract this paper is about electricity market operation when looking from the wind power producers point of view the focus in on market time horizons how many hours there is between the closing and delivering the bids the case is for the nordic countries the nordpool electricity market and the danish wind power production real data from year 2001 was used to study the benefits of a more flexible market to wind power producer as a result of reduced regulating market costs from better hourly predictions to the market wind power producer would gain up to 8 more if the time between market bids and delivery was shortened from the day ahead elspot market hourly bids by noon for 12 36 h ahead an after sales market where surplus or deficit production could be traded 2 h before delivery could benefit the producer almost as much gaining 7

state contingent bank regulation with unobserved actions and unobserved characteristics abstract optimal bank regulation is studied in a model where bank quality is private information and bank portfolio choice is subject to moral hazard regulators wish to control bank risk solely because high risk adversely affects a bank incentives to improve its mean return numerical methods are developed to study the model capital regulation alone has a limited ability to separate types including ex post fines achieve separation at lower cost resulting in improved welfare low quality banks are fined on high returns in order to control risk taking high quality banks face fines on lower returns mainly to ensure truth telling by low quality banks high quality banks bear the full cost of regulation

globalization veto players and welfare spending this article examines the role of globalization and its interaction with domestic political institutions veto players in shaping welfare spending in 18 advanced industrial countries from 1960 to 2000 first the author evaluates how integrated world markets have influenced welfare expenditures results suggest that globalization increased welfare spending in this sample second the author studies how domestic political institutions mediate the impact of globalization on welfare spending with a new data set on veto players for the years 1960 to 2000 the author finds that as the number of and ideological distance among veto players increases the upward pressure of globalization on welfare spending is reduced the results show that globalization has pressured states to expand welfare spending but the extent to which states have responded to pressure critically depends on the number of and ideological distance among veto players whose agreement is required to change welfare policy

collateral effects of liberalisation metering losses load profiles and cost settlement in spain s electricity system european energy markets have undergone a major transformation as they have advanced towards market liberalisation and it is vital that the details of these developments be carefully examined the success of liberalisation is based on smart regulation which has been capable of providing solutions to unforeseen events in the process our paper seeks to contribute to existing understanding of the unexpected and collateral effects of the liberalisation process in the power system by examining a natural experiment that occurred in spain in 2009 in that year the electricity supply by distribution system operators disappeared this change in retail market competition as we demonstrate in this paper has had an unexpected effect in terms of the system s balancing requirements we undertake a rigorous assessment of the economic consequences of this policy change for the whole system in terms of its impact on final electricity prices

political partisanship and welfare state reform in advanced industrial societies in this article we evaluate two claims made in recent studies of the welfare states of advanced industrial societies first that welfare states have remained quite resilient in the face of demands for retrenchment and second that partisan politics have ceased to play a decisive role in their evolution addressing the first claim we present analysis from a new data set on unemployment insurance and sickness benefit replacement rates for 18 countries for the years 1975 99 we find considerably more evidence of welfare retrenchment during the last two decades than do recent cross national studies second we examine the end of partisanship claim by estimating the effects of government partisanship on changes in income replacement rates in sickness and unemployment programs our results suggest that contrary to claims that partisanship has little impact on welfare state commitments traditional partisanship continues to have a considerable effect on welfare state entitlements in the era of retrenchment

distribution and redistribution in postindustrial democracies this paper analyzes the processes of distribution and redistribution in post industrial democracies we combine a pooled time series data base on welfare state effort and its determinants assembled by huber ragin and stephens 1997 with data on income distribution assembled in the luxembourg income survey lis archive in the case of the lis data we re calculate the micro data in order to remove the distorting influence of pensioners on pre tax pre transfer income distribution we examine the determinants of three dependent variables pre tax pre transfer income inequality post tax post transfer income inequality and the proportional reduction in inequality from pre to post tax and transfer inequality we hypothesized that pre tax pre transfer income inequality would be determined by labor market institutions union density bargaining centralization labor market conditions unemployment and economic structures post industrialism third world imports we hypothesized that the reduction in inequality would be determined by political configurations directly by left government and indirectly via their effect on welfare state generosity by left government and christian democratic government post tax and transfer income inequality was hypothesized to be a product of the combination of labor market variables and political variables the results broadly confirms our hypotheses and the overall fit is very good

private information and intertemporal job assignments this paper studies the assignment of people to projects over time in a model with private information the combination of risk neutrality with incomplete contracts that restrict the ability of an agent to report on interim states is a force for long term assignments more generally however rotating agents can be valuable because it conceals information from agents which mitigates incentive constraints with complete contracts that communicate interim states rotation allows for even more concealment possibilities and better targeted incentives furthermore it allows for the reporting of interim shocks at no cost to the principal properties of the production technology are also shown to matter substitutability of intertemporal effort is a force for long term assignments while coordination with nash equilibrium strategies is a force for job rotation copyright 2006 wiley blackwell

global markets and national politics collision course or virtuous circle increasing exposure to trade foreign direct investment and liquid capital mobility have not prompted a pervasive policy race to the neoliberal bottom among the oecd countries one reason is that there are strong political incentives for governments to cushion the dislocations and risk generated by openness moreover countries with large and expanding public economies when balanced with increased revenues even from capital taxes have not suffered from capital flight or higher interest rates this is because the modern welfare state comprising income transfer programs and publicly provided social services generates economically important collective goods that are undersupplied by markets and that actors are interested in productivity value these range from the accumulation of human and physical capital to social stability under conditions of high market uncertainty to popular support for the market economy itself as a result arguments about the demise of national autonomy in the global economy are considerably overdrawn

the eclipse of the state reflections on stateness in an era of globalization the economic logic of the current international economy does not predict the eclipse of the state economic globalization does restrict state power but transnational capital needs capable states as much or more than does domestically oriented business national success in the current global political economy has been associated not with minimal states but with states that are capable active and engaged pressure for eclipse flows from the conjunction between transnational economic forces and the political hegemony of an anglo american ideology that in j p nettl s words simply leaves no room for any valid notion of the state even this combination of economic and political pressure is unlikely to eclipse the state but it is likely to put public institutions on the defensive eclipsing any possibility of the embedded liberalism described by john ruggie a leaner meaner state is the likely outcome the possibility of a more progressive alternative outcome would depend in part on whether current zero sum visions of the relation between the state and civil society can be replaced by a more synergistic view

regulation of a risk averse firm abstract we extend the laffont tirole regulation model to the case of risk averse firms our main results are the impact of risk aversion is to shift the optimal contract toward a cost plus contract as compared with the risk neutral case distortions are greater and informational rents are smaller for high levels of risk aversion the optimal contract involves cost ceilings and the less efficient firms are bunched together journal of economic literature classification numbers d8 l5

the new political economy of taxation in advanced capitalist democracies earlier versions of this paper were presented at the 1999 annual meeting of the american political science association september 1 5 atlanta ga and the 2000 annual meeting of the midwest political science association april 27 30 chicago il the authors thank steffen ganghof philip genschel mark hallerberg alex hicks william keech dennis quinn and the anonymous reviewers and editor of this journal for many helpful comments and dennis quinn for generously sharing data duane swank thanks the german marshal fund of the united states and marquette university for support of work incorporated in this paper data utilized in this paper are available from duane swank marquette edu

does economic globalisation affect income inequality a meta analysis a large volume of econometric literature has studied the impact of economic globalisation on income inequality around the world however reported econometric estimates vary substantially which makes it difficult to draw valid conclusions this paper presents a quantitative summary and analysis of existing estimates regarding the globalisation inequality relationship we use a new data set consisting of 1 254 observations from 123 primary studies by applying meta analysis and meta regression methods we obtain several main findings first globalisation has a small to moderate inequality increasing effect second while the effect of trade globalisation is small financial globalisation shows a more sizeable and significantly stronger inequality increasing impact third we find an average inequality increasing impact of globalisation in both advanced and developing countries fourth education and technology moderate the impact of globalisation on income inequality

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

awarding monopoly franchises the authors analyze how to award a monopoly franchise when the objective is to maximize expected consumers surplus net of transfer payments to the producer potential producers initially possess independent private information about uncertain production costs only the chosen producer subsequently observes realized production costs after awarding the franchise to the producer with the lowest expected costs prices are optimally set above realized marginal cost these ex post distortions foster more competitive bidding ex ante the distortions for any bid cost pair are invariant to the number of bidders n though expected distortions and profits decline with n copyright 1987 by american economic association

does immigration undermine public support for social policy there has been great interest in the relationship between immigration and the welfare state in recent years and particularly since alesina and glaeser s 2004 influential work following literatu

the welfare state and competitiveness in all industrial countries fiscal policy is increasingly about redistribution in this paper the authors study redistribution across different types of agents in a world characterized by the presence of labor unions and distortionary taxation they show that an increase in transfers financed by distortionary taxation has nonlinear effects on unit labor costs relative to the other countries depending on the degree of centralization of the wage setting process in the labor market the authors find considerable empirical support for the model in a sample of fourteen oecd countries copyright 1997 by american economic association

globalization and taxation challenges to the swedish welfare state many have argued that the increased international mobility of both capital and labor witnessed in recent years will force advanced capitalist democracies to cut taxes and thus ultimately roll bac

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

the causes of welfare state expansion deindustrialization or globalization an influential line of argument holds that globalization causes economic uncertainty and spurs popular demands for compensatory welfare state spending this article argues that the relationship between globalization and welfare state expansion is spurious and that the engine of welfare state expansion since the 1960s has been deindustrialization based on cross sectional time series data for fifteen oecd countries the authors show that there is no relationship between globalization and the level of labor market risks in terms of employment and wages whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing yet while differential rates of deindustri alization explain differences in the overall size of the welfare state its particular character in terms of the share of direct government provision and the equality of transfer payments is shaped by government partisanship the argument has implications for the study and the future of the welfare state that are very different from those suggested in the globalization literature

effects of large scale penetration of renewables the italian case in the years 2008 2015 abstract italy has experienced a revolution in the electricity production mix in the years 2008 2015 when a large scale deployment of intermittent renewables caused a high volatility of electricity prices stopped the investments in both fossil and renewable power plants and caused a high degree of uncertainty in matching electricity demand and supply the current legislation gives renewable energy the priority of dispatchment producing a significant decrease of the operational hours of all kinds of power plants which caused economic problems to utilities that had started investments in new high efficiency combined cycles before 2008 and reduced the overall efficiency of fossil fired power generation in order to restore the opportunities for further investments in renewable energy systems it is very important to develop long term policies and interventions to improve the capacity to balance the electricity demand and supply

incentive contracting with asymmetric and imperfect precontractual knowledge abstract the pareto optimal contract between principal and risk neutral agent is analyzed for the case in which the agent s information is initially imperfect but better than that of the principal in contrast to the case where precontractual information is symmetric the final contract between principal and agent will not always guarantee an efficient outcome however in contrast to the case where the agent s information is initially perfect the agent may be unable to command rents from his superior information and the outcome will always be efficient the conditions under which efficient or inefficient outcomes are guaranteed differ qualitatively according to whether the random stete of nature follows a continuous or a discrete distribution journal of economic literature classification numbers 022 026 611

the impact of regulatory quality and corruption on residential electricity prices in the context of electricity market reforms abstract the european electricity markets have been undergoing significant regulatory reforms since the introduction of the first liberalisation directive in 1996 theory predicts that liberalisation promotes cost efficient production and competition and hence leads to lower prices the goal of this paper is to assess the impact of regulatory quality and non compliance with the law on electricity prices in the context of electricity market reforms we address problems of endogeneity by using the blundell blond system gmm estimator and find that vertical integration and market concentration lower end user prices all else equal moreover improving regulatory quality and reducing corruption both have a negative impact on prices when holding other factors constant the intensity of the reforms has limited impact on electricity prices when these reforms are introduced in an institutional environment characterised by high levels of corruption and low quality regulation

globalization party positions and the median voter the authors argue that the effects of economic globalization on social democratic parties in western europe are conditional on the position of the median voter if the median is far enough to the right such parties will adopt business friendly policies because they are required to win office only when the median is relatively far to the left will globalization constrain social democratic parties forcing them to adopt policies further to the right in order to retain credibility it is on this basis the authors argue that empirical studies are misspecified unless they include an interaction between measures of globalization and the position of the median in addition to presenting formal theoretical arguments the article reports empirical findings from fifteen countries in the period from 1973 to 2002 that support the conclusion that the effects of globalization are indeed contingent on the median the authors find that the effects of globalization are significant for social democratic parties only in circumstances in which the median is relatively far to the left

the welfare state in transition reforming the swedish model acknowledgments introduction richard b freeman robert topel birgitta swedenborg 1 generating equality and eliminating poverty the swedish way anders bjorklund richard b freeman 2 public employment taxes and the welfare state in sweden sherwin rosen 3 tax policy in sweden erik norrman charles e mclure jr 4 wage policy and restructuring the swedish labor market since 1960 per anders edin robert topel 5 the effects of sweden s welfare state on labor supply incentives thomas aronsson james r walker 6 an evaluation of the swedish active labor market policy new and received wisdom anders forslund alan b krueger 7 taxes and subsidies in swedish unemployment lars ljungqvist thomas j sargent 8 the social costs of regulation and lack of competition in sweden a summary stefan folster sam peltzman 9 industrial policy employer size and economic performance in sweden steven j davis magnus henrekson 10 a heckscher ohlin view of sweden competing in the global marketplace edward e leamer per lundborg contributors author index subject index

a theoretical analysis of procurement auctions for tertiary control in germany as far as energy policy is concerned the design of the regulatory framework for energy transmission and distribution is a key issue consequently also the embodiment of balancing power markets drives mainly the effectiveness of political implications for the energy sector initially tertiary control in germany was solely offered by transmission system operators of the respective power control areas and their associated power plant the recast of the energy industry act of 2005 led in last consequence to a common procurement auction for the supply of tertiary control which starts on december 1 2006 admittedly the reform has fallen short of expectations so far first concerning the intensification of market entry of tertiary control providers as well as the desired decline of the price level hence this article examines the effects of the changeover on observable demand charges in order to identify attributes of the common procurement auction for tertiary control hampering market entry of providers giving stimuli to collusion and strategic behavior reducing intensity of competition and encouraging an upswing of prices we analyze the design under an auction theoretical approach and deduce empirically whether structural components of the auction design have to be touched up again

learning from others the diffusion of hospital financing reforms in oecd countries the increase in health care expenditures is a major problem of all welfare states to counter this trend since the early 1980s most oecd countries have changed the way hospitals are financed although these reforms are certainly linked to country specific factors the authors main argument is that they are in part due to a diffusion process policy change in one country is influenced by previous changes in other countries more specifically the authors argue that policy makers learn from the experience of others using an original data set and event history methods to test arguments their results show that policy change is more likely when the existing policy is ineffective and when the experience of other countries suggests that the reform leads to the desired results in addition the authors find that the effects of learning grow over time and that early adopters tend to be countries with few veto players

money supply class power and inflation monetarism reassessed recent sociological work shows that pro market neoliberal policies across advanced capitalist countries are due to distributional struggle between classes in the 1970s and 1980s the orthodox monetarist view alternatively sees neoliberal reform as a nonpolitical attempt to end the stagflation crisis of the 1970s from this perspective monetary and fiscal expansions brought high inflation and central bank discipline and government austerity is the solution but the recent trend of low inflation despite accelerating money growth and government spending contradicts this view analyses of time series cross section data for 23 oecd countries from 1960 to 2009 support the thesis that the rise and fall of inflation is more about distribution of power between labor and capital than about monetary and fiscal discipline inflation in the 1970s originated from a strong working class and hurt capital more than it did workers while neoliberal repression of workers power has kept inflation low from the 1980s onwa

balancing power and variable renewables three links abstract balancing power is used to quickly restore the supply demand balance in power systems the need for this tends to be increased by the use of variable renewable energy sources vre such as wind and solar power this paper reviews three channels through which vre and balancing systems interact the impact of vre forecast errors on balancing reserve requirements the supply of balancing services by vre generators and the incentives to improve forecasting provided by imbalance charges the paper reviews the literature provides stylized facts from german market data and suggests policy options surprisingly while german wind and solar capacity has tripled since 2008 balancing reserves have been reduced by 15 and costs by 50

a review of balancing costs in italy before and after res introduction abstract the massive introduction of res in electricity markets is recognized to have induced a merit order effect on wholesale prices while day ahead prices are likely to decline as res e production increases the effects on balancing market sessions are more ambiguous taking into account the northern italian zone characterized by a high solar pv and hydro penetration we provide empirical evidence that balancing quantities decreased while costs increased between two samples associated with low 2006 08 and high 2013 15 res levels we estimate balancing costs for different technologies and compare their dynamics across specific hours we find evidence of increasing balancing prices in particular market conditions that we interpret as a signal of strategic use of real time sessions by conventional producers prone to the merit order effect in the day ahead market we compare our results to those obtained in the german market where on the contrary balancing costs have decreased and postulate that the different market designs may explain these results our findings suggest that the italian policy makers should carefully monitor all trading sessions especially those close to real time to avoid the exercise of market power by few operators allowed to guarantee system security and additionally to promptly adopt a capacity market

globalization welfare regimes and social protection expenditures in western and eastern european countries this paper analyzes the effects of globalization on social protection expenditures in european countries the particular focus is on a the eastern european countries and b on differences in globalization effects between welfare regimes we find evidence in favor of the compensation hypothesis in western europe which is driven by the conservative welfare regime outweighing the efficiency effect of globalization in the social democratic welfare regime in eastern european countries the efficiency effect is predominant no globalization effect is found for the liberal and the southern welfare regimes

explaining deindustrialization globalization failure or success although sociologists have expressed growing interest in globalization they have devoted little sustained empirical attention to the many claims made in its name i focus on the link that has been drawn between globalization and the deindustrialization of the advanced industrial societies to examine this i employ a pooled time series of cross sections data set that combines observations on 18 oecd nations across the 1968 1992 period fixed effects regression models that control for unmeasured country specific effects reveal support for arguments that implicate foreign direct investment and north south trade in the declining percentage of the labor force employed in manufacturing in the oecd countries regression results also show that deindustrialization across this period is largely explained by a model that combines an attention to the post golden age troubles of northern manufacturing with classic generalizations of the process of development interpretation of the empirical findings is tempered by an exercise in counterfactual history which reveals that deindustrialization would have been considerable in these countries even if the upswings in direct investment and southern imports had not occurred or if the performance of the manufacturing sector had been stronger

economic globalization and the welfare state in affluent democracies 1975 1998 prior scholarship is sharply divided on how or if globalization influences welfare states globalization s effects may be positive causing expansion negative triggering crisis and reduction curvilinear contributing to convergence or insignificant we bring new evidence to bear on this crucial debate with a pooled time series analysis of two measures of the welfare state and 16 indicators of economic globalization for 17 affluent democracies from 1975 to 1998 the analysis suggests that 1 state of the art welfare state models warrant revision in the globalization era 2 most indicators of economic globalization do not have significant effects 3 the few significant globalization effects are in different directions and often inconsistent with extant theories 4 the globalization effects are far smaller than the effects of domestic political and economic factors and 5 these effects are not systematically different for liberal vs nonliberal welfare state regimes european vs non european countries or with four alternative dependent variables increased globalization and a modest convergence of the welfare state have occurred but globalization does not unambiguously cause welfare state expansion crisis and reduction or convergence bisherige befunde der sozialwissenschaftlichen forschung zum kausalen verhaltnis von globalisierung und wohlfahrtsstaat sind nicht eindeutig danach kann globalisierung positive effekte haben und zu einem ausbau an wohlfahrtsstaatlichkeit fuhren eine krise des wohlfahrtsstaates oder leistungsreduktionen herbeifuhren kurvilineare wirkungen aufweisen und zu konvergenz beitragen als auch vollkommen insignifikant sein unsere gepoolte zeitreihenanalyse von wohlfahrtsstaatlichkeit und globalisierung in 17 reichen demokratien 1975 1998 hat folgende befunde zu tage gefordert 1 im zeitalter der globalisierung erscheinen bestehende wohlfahrtsstaatsmodelle revisionsbedurftig 2 die mehrzahl der okonomischen globalisierungsindikatoren weist keine signifikanten effekte auf 3 die wenigen signifikanten effekte zeigen in unterschiedliche richtungen und stimmen haufig nicht mit bestehenden theoretischen annahmen uberein 4 die globalisierungseffekte sind deutlich kleiner als die effekte binnenpolitischer variablen und okonomischer faktoren 5 diese effekte unterscheiden sich in liberalen und nicht liberalen wohlfahrtsregimen bzw europaischen und nicht europaischen landern nicht systematisch von einander im analysezeitraum konnen wir sowohl einen anstieg der verschiedenen globalisierungsindikatoren sowie eine moderate konvergenz der verschiedenen wohlfahrtsstaaten konstatieren jedoch kann der prozess der globalisierung nicht eindeutig als kausale ursache fur die unterschiedlichen entwicklungsrichtungen in den verschiedenen wohlfahrtsstaaten identifiziert werden

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

the market value of variable renewables the effect of solar wind power variability on their relative price this paper provides a comprehensive discussion of the market value of variable renewable energy vre the inherent variability of wind speeds and solar radiation affects the price that vre generators receive on the market market value during windy and sunny times the additional electricity supply reduces the prices because the drop is larger with more installed capacity the market value of vre falls with higher penetration rate this study aims to develop a better understanding on how the market value with penetration and how policies and prices affect the market value quantitative evidence is derived from a review of published studies regression analysis of market data and the calibrated model of the european electricity market emma we find the value of wind power to fall from 110 of the average power price to 50 80 as wind penetration increases from zero to 30 of total electricity consumption for solar power similarly low value levels are reached already at 15 penetration hence competitive large scale renewable deployment will be more difficult to accomplish than as many anticipate

analysis of the imbalance price scheme in the spanish electricity market a wind power test case this work investigates the interaction between wind power and electricity markets the paper is focused on balancing markets pricing policies the proposal of a new imbalance price scheme is included and conveniently evaluated this proposed scheme tries to minimise the use of ancillary services to compensate for deviations in searching for a more efficient market design the effectiveness of imbalance prices as market signals is also examined and policy recommendations regarding imbalance services are discussed two test cases are included that analyse the participation of a wind power producer in the spanish electricity market using a stochastic optimisation strategy for this purpose the uncertainty of the variables is considered i e wind power production and prediction intraday and imbalance prices test cases were run with real data for 10 months and realistic results are presented along with a hypothetical test case the regulation of the imbalance prices may not be adequate for the spanish electricity market because an error drop is not sufficiently encouraged therefore we suggest the application of a new imbalance price scheme which includes an additional constraint the conclusions of this paper can be assumed to be general policy recommendations

the determinants of income inequality in oecd countries the objective of this paper is to identify the determinants of the increase in income inequality that oecd countries have experienced over the past two decades my hypothesis is that along with the financialisation of economies that has taken place since 1990 inequality increased because labour flexibility intensified labour market institutions weakened as trade unions lost power and public social spending started to retrench and did not compensate for the vulnerabilities created by the globalisation process using data from 25 high income oecd countries from 1990 to 2013 i empirically evaluate this hypothesis my results clearly suggest that the increase in inequality over the past two decades is caused by an increase in financialisation a deepening of labour flexibility the weakening of trade unions and the retrenchment of the welfare state

openness government size and the terms of trade this paper investigates the relationship between trade openness and the size ofngovernments both theoretically and empirically we argue that openness can increase the size of governments through two channels 1 a terms of trade externality whereby trade lowers the domestic cost of taxation and 2 the demand for insurance whereby trade raises risk and public transfers we provide a unified framework for studying and testing these two mechanisms our main theoretical prediction is that the relative strength of the two explanations depends on a key parameter namely the elasticity of substitution between domestic and foreign goods moreover while the first mechanism is inefficient from the standpoint of world welfare the second is instead optimal in the empirical part of the paper we provide new evidence on the positive association between openness and government size and we explore its determinants consistently with the terms of trade externality channel we show that the correlation is contingent on a low elasticity of substitution between domestic and foreign goods our findings raise warnings that globalization may have led to inefficiently large governments

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

welfare state retrenchment revisited entitlement cuts public sector restructuring and inegalitarian trends in advanced capitalist societies in recent years it has become commonplace for comparativists to emphasize the resilience of welfare states in advanced capitalist societies and the failure of neoliberal efforts to dismantle the welfare state challenging some tenets of the resilience thesis this article seeks to broaden the discussion of welfare state retrenchment the authors argue that a sharp deceleration of social spending has occurred in most oecd countries since 1980 that welfare states have failed to offset the rise of market generated inequality and insecurity and that welfare programs have become less universalistic they stress the distributive and political consequences of market oriented reforms of the public sector

the social construction of an imperative why welfare reform happened in denmark and the netherlands but not in germany this article seeks to explain why denmark and the netherlands made dramatic progress reforming their welfare systems in the 1990s and why germany had a relatively slow start some possible explanations found to be incomplete are institutional differences in welfare programs the uniqueness of circumstances for example german unification and the balance of political power in governing institutions an important part of the puzzle is an increasing perception of the need to reform that was more widespread in denmark and the netherlands the social construction of an imperative to reform in these countries generated a political consensus that was elusive in germany but that may be developing under gerhard schroder s government

labour share decline financialisation and structural change the purpose of this article is to explain the determinants behind the decline of labour share in the last three to four decades in oecd countries in our view this decline was determined by financialisation and was deepened by the structural changes that occurred almost simultaneously in those economies financialisation or finance dominated capitalism from the 1980s onwards was a key element in the strategic offensive of the advanced countries dominant classes to appropriate higher shares of national income and to restore their control over the political process a control that had been threatened by a generalised advancement of the labour movement in the 1970s the development of a finance dominated capitalism was helped by the process of globalisation which affected not only oecd countries but also many others a new though unstable macroeconomic model emerged which we will call financial capitalism in financial capitalism trade unions lost power vis a vis capital labour flexibility increased enormously and a structural change from manufacturing to services was accelerated in rich countries this resulted in negative consequences for labour share and income inequality after having provided a theoretical discussion of the determinants of the compression of the wage share making reference to the relevant literature we submit our hypotheses to empirical scrutiny performing a panel data analysis on 28 oecd countries the results of the estimations provide support to the theoretical argument

determinants of relative poverty in advanced capitalist democracies using relative poverty measures based on micro level data from the luxembourg income study in conjunction with pooled time series data for 14 advanced capitalist democracies between 1970 and 1997 the authors analyze separately the rate of pretax transfer poverty and the reduction in poverty achieved by systems of taxes and transfers socioeconomic factors including de industrialization and unemployment largely explain pre tax transfer poverty rates of the working age population in these advanced capitalist democracies the extent of redistribution measured as poverty reduction via taxes and transfers is explained directly by welfare state generosity and constitutional structure number of veto points and the strength of the political left both in unions and in government

trade and the political economy of redistribution this paper shows how international trade affects the support for policies which redistribute income between workers across sectors and how the existence of such policies changes the support for trade liberalization workers who are imperfectly mobile across sectors vote on whether to subsidize ailing sectors thereby redistributing income but also distorting the labor allocation we present three main findings first redistributive policies are more likely to arise in a small open than in a closed economy for a broad range of parameters second if a redistributive policy is adopted in both situations income differences across sectors tend to be lower in the open economy third the possibility to redistribute income across sectors raises the political support for trade liberalization in the first place

partisan governance women s employment and the social democratic service state the causes of the expansion and cross national variation in the provision of welfare state goods and services are examined social democratic governance is by far the most important determinant of the public delivery of services and is one of the most important determinants of the public funding of the provision of welfare state goods and services christian democratic governance is an important determinant of public funding of services but is not related to public delivery state structure is also an important determinant women s labor force participation is an important determinant of the expansion of public social welfare services net of other social political and historical factors the analysis also shows an interactive effect of women s labor force participation and social democratic governance on public delivery of welfare state services we conclude that public delivery of a wide range of welfare state services is the most distinctive feature of the social democratic welfare state and that this feature is a product of the direct and interactive effects of social democracy and women s mobilization

a renegotiation proof mechanism for a principal agent model with moral hazard and adverse selection in this article i shall analyze a principal agent model with moral hazard and adverse selection i show that for a large class of environments communication has no value to the principal and that he cannot do better than to average over the different types of agents this observation is then used to derive a renegotiation proof mechanism

millionaire migration and taxation of the elite evidence from administrative data a growing number of u s states have adopted millionaire taxes on top income earners this increases the progressivity of state tax systems but it raises concerns about tax flight elites migrating from high tax to low tax states draining state revenues and undermining redistributive social policies are top income earners transitory millionaires searching for lower tax places to live or are they embedded elites who are reluctant to migrate away from places where they have been highly successful this question is central to understanding the social consequences of progressive taxation we draw on administrative tax returns for all million dollar income earners in the united states over 13 years tracking the states from which millionaires file their taxes our dataset contains 45 million tax records and provides census scale panel data on top income earners we advance two core analyses 1 state to state migration of millionaires over the long term and 2 a sharply focused discontinuity anal