analyzing nutritional impacts of policies an empirical study for malawi summary widespread malnutrition in developing countries calls for appropriate strategies presupposing good knowledge about nutritional impacts of policies little previous work has been carried out in this direction especially with respect to micronutrients we use representative household data from malawi and develop a demand systems approach to estimate income and price elasticities of food demand and nutrient consumption these estimates are applied for policy simulations given multiple nutritional deficiencies income related policies are better suited than price policies to improve nutrition while consumer price subsidies for maize improve calorie and mineral consumption they can worsen vitamin consumption in urban areas

a multi period optimization model for planning of china s power sector with consideration of carbon dioxide mitigation the importance of continuous and stable carbon mitigation policy abstract a great challenge china s power sector faces is to mitigate its carbon emissions whilst satisfying the ever increasing power demand optimal planning of the power sector with consideration of carbon mitigation for a long term future remains a complex task involving many technical alternatives and an infinite number of possible plants installations retrofitting and decommissioning over the planning horizon previously the authors built a multi period optimization model for the planning of china s power sector during 2010 2050 based on that model this paper executed calculations on the optimal pathways of china s power sector with two typical decision making modes which are based on full information and limited information hypothesis and analyzed the impacts on the optimal planning results by two typical types of carbon tax policies including a continuous and stable one and a loose first and tight later one the results showed that making carbon tax policy for long term future and improving the continuity and stability in policy execution can effectively help reduce the accumulated total carbon emissions and also the cost for carbon mitigation of the power sector the conclusion of this study is of great significance for the policy makers to make carbon mitigation policies in china and other countries as well

applying real options in investment decisions relating to environmental pollution abstract this study focuses on how to assess the optimal environmental investment decisions under economic and ecological uncertainty and establishes the continuous time model using the real option approach to optimize environmental pollution policy unlike traditional cost benefit analysis this work extends the model of pindyck r s 2002 optimal timing problems in environmental economics journal of economic dynamics and control 26 9 10 1677 1697 and attempts to identify the storage threshold of pollution stocks and the optimal timing for implementing environmental pollution decisions

option value of gasification technology within an emissions trading scheme investment analysis is mostly implemented with discounted cash flow dcf methods such as the net present value npv the problem in a typical application of these methods is the limited ability to value real options management s ability to adapt to changing market conditions or to revise decisions this paper presents a simulation model in which the investment is regarded as a single firm problem in an operating environment with multiple exogenous and stochastic prices the simulation model is used to explore the impact of emissions trading and in particular the european union emissions trading scheme eu ets on investments in integrated gasification combined cycle igcc plants two real case studies are presented modifications of an existing condensing power plant and a new combined heat and power plant the benefit of the selected approach is that it can take into account the value of multiple simultaneous real options better than a standard dcf analysis the results show that a straightforward application of dcf analysis can lead to biased results in competitive energy markets within an emissions trading scheme where a number of uncertainties potentially combined with several real options can make quantitative investment appraisals very complex

business case uncertainty of power plants in future energy systems with wind power abstract the european power sector is transforming due to climate policies and an increased deployment of intermittent res the sector will require thermal power plants for the decades to come but their business cases are negatively affected by this transformation this study presents a novel tool to quantify the effect of policy price and project related uncertainties on power plant business cases this tool can support policymakers in stimulating necessary investments in new thermal generation capacity we find that these investments are currently unsound power plants recoup on average 12 to 59 of their initial investment future climate policy i e the co 2 price has a very strong impact on business cases affects the profitability by 5 40 points the impact of the deployment of wind power is average 2 8 point difference between 10 and 21 wind penetration variations in annual wind power production barely affect the profitability variation of 1 point to stimulate new investments policymakers should first decrease the uncertainty in business cases caused by policy durable climate policy is especially important also policies to increase the profits of thermal power plants should be carefully considered and implemented this combined approach will reduce the revenue gap that needs to be bridged by supportive policies

a time series analysis of representative agent models of consumption andleisure choice under uncertainty this paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime separable the nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked these cross relations are examined empirically using postwar monthly u s data on quantities real wages and the real return on the one month treasury bill the estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models several possible explanations of these discrepancies are discussed

investment tax credit in an open economy abstract this paper contrasts the effects of a permanent and temporary investment tax credit itc in an open economy in both cases an itc will initially stimulate investment while reducing employment and output and generating a current account deficit if the itc is permanent the accumulation of capital leads to a higher equilibrium capital stock higher employment and output and a reduction in the economy s stock of net credit if the itc is temporary after its removal the economy eventually moves to a new steady state equilibrium having a lower permanent capital stock and employment together with a higher stock of net credit

an optimization methodology for identifying robust process integration investments under uncertainty uncertainties in future energy prices and policies strongly affect decisions on investments in process integration measures in industry in this paper we present a five step methodology for the identification of robust investment alternatives incorporating explicitly such uncertainties in the optimization model methods for optimization under uncertainty or stochastic programming are thus combined with a deep understanding of process integration and process technology in order to achieve a framework for decision making concerning the investment planning of process integration measures under uncertainty the proposed methodology enables the optimization of investments in energy efficiency with respect to their net present value or an environmental objective in particular as a result of the optimization approach complex investment alternatives allowing for combinations of energy efficiency measures can be analyzed uncertainties as well as time dependent parameters such as energy prices and policies are modelled using a scenario based approach enabling the identification of robust investment solutions the methodology is primarily an aid for decision makers in industry but it will also provide insight for policy makers into how uncertainties regarding future price levels and policy instruments affect the decisions on investments in energy efficiency measures

sequential investment in renewable energy technologies under policy uncertainty although innovation and support schemes are among the main forces that drive investment in renewable energy re technologies both involve considerable uncertainty we develop a real options framework to analyse the impact of technological policy and electricity price uncertainty on the decision to invest sequentially in successively improved versions of a re technology technological uncertainty is reflected in the random arrival of innovations and policy uncertainty in the likely provision or retraction of a subsidy that takes the form of a fixed premium on top of the electricity price we show that greater likelihood of subsidy retraction provision lowers raises the incentive to invest and by comparing a stepwise to a lumpy investment strategy we show how an embedded option to adopt an improved technology version mitigates the impact of subsidy retraction on investment timing specifically we show how stepwise investment facilitates earlier technology adoption compared to lumpy investment and that under stepwise investment technological uncertainty accelerates technology adoption thus further offsetting the incentive to delay investment in the light of subsidy retraction

co2 emission standards and investment in carbon capture abstract policy makers in a number of countries have proposed or are considering proposing co 2 emission standards for new fossil fuel fired power plants the proposed standards require coal fired power plants to have approximately the same carbon emissions as an uncontrolled natural gas fired power plant effectively mandating the adoption of carbon capture and sequestration ccs technologies for new coal plants however given the uncertainty in the capital and operating costs of a commercial scale coal plant with ccs the impact of such a standard is not apparent a priori we apply a stochastic generation expansion model to determine the impact of co 2 emission standards on generation investment decisions and in particular for coal plants with ccs moreover we demonstrate how the incentive to invest in coal ccs from emission standards depends on the natural gas price the co 2 price and the enhanced oil recovery price as well as on the level of the emission standard this analysis is the first to consider the entire power system and at the same time allow the capture percentage for ccs plants to be chosen from a continuous range to meet the given standard at minimum cost previous system level studies have assumed that ccs plants capture 90 of the carbon while studies of individual units have demonstrated the costs of carbon capture over a continuous range we show that 1 currently proposed levels of emission standards are more likely to shift fossil fuel generation from coal to natural gas rather than to incentivize investment in ccs 2 tighter standards that require some carbon reductions from natural gas fired power plants are more likely than proposed standards to incentivize investments in ccs especially on natural gas plants but also on coal plants at high gas prices and 3 imposing a less strict emission standard emission rates higher than natural gas but lower than coal e g 1500 lbs mwh is more likely than current proposals to incentivize investment in coal ccs technology but only at high gas prices and to a lesser extent than a stringent standard e g 300 lbs mwh

habits and durability in consumption and the dynamics of the current account abstract a model in which consumption exhibits durability and habits develop over the flow of services provided by them is used to study current account dynamics durability leads to adjacent substitutability in consumption while habits are assumed to lead to adjacent complementarity the adjustment of the current account may be non monotonic if habit effects are dominant in the short run and durability effects in the long run then after a terms of trade deterioration we will have a current account deficit followed by a surplus the j curve in the opposite case a surplus will be followed by a deficit 1998 elsevier science b v

issues relating to the un system of national accounts and developing countries abstract the recent revision of the united nations system of national accounts sna represents improved harmonization of the international trade balance of payments government finance and monetary data collected by national and international statistical agencies although such harmonization is welcomed by the developing countries a number of other major unresolved issues remain specifically the sna has not solved problems relating to 1 delineation of the formal and informal sectors of an economy 2 appropriate treatment of market and non market production and 3 satisfactory analysis of sector saving and capital formation and 4 harmonization of household sector macrodata with household survey microdata

biodiesel investment in a disruptive tax credit policy environment abstract an investigation of poisson type policy jumps on biodiesel investment considers the theory of investment under uncertainty the analysis studies the probability of implementing a policy if it is not in effect and the probability of withdrawal if it is in effect an application models the policy switching regime of the discontinuous u s federal tax credit of 1 00 per gallon on biodiesel results support that time inconsistent government policies do lead to market uncertainty the analysis reveals a pronounced negative impact on decisions to invest in a biodiesel refinery results do indicate a consistent policy switching regime may not be that disruptive to the emerging biodiesel industry it is policy uncertainty that drives the option pricing thresholds and a consistent policy switching does not increase the uncertainty

biomass and ccs the influence of technical change the combination of bioenergy production and carbon capture and storage technologies beccs provides an opportunity to create negative emissions of co2 in biofuel production however high capture costs reduce profitability this paper investigates carbon price uncertainty and technological uncertainty through a real option approach we compare the cases of early and delayed ccs deployments an early technological progress may arise from aggressive r d and pilot project programs but the expected cost reduction remains uncertain we show that this approach results in lower emissions and more rapid investment returns although these returns will not fully materialise until after 2030 in a second set of simulations we apply an incentive that prioritises sequestered emissions rather than avoided emissions in other words this economic instrument does not account for co2 emissions from the ccs implementation itself but rewards all the sequestered emissions in contrast with technological innovations this subsidy is certain for the investor the resulting investment level is higher and the project may become profitable before 2030 negative emission in bioethanol production does not seem to be a short term solution in our framework whatever the carbon price drift

strategies against shocks in power systems an analysis for the case of europe abstract electricity systems are constantly exposed to geopolitical techno economic and natural uncertainties that may endanger security of supply therefore it is crucial that policy makers concerned about it consider a variety of possible futures and not only the one that is perceived as the most likely in particular they should account for the possibility of sudden shocks in their decisions with the goal of making the system more robust however long term power system models which are an important pillar of policy decision making are typically designed to determine the cost minimal power system for a specific expected future such a system is not necessarily the most robust one by combining the classic investment optimization approach with the tools of robust decision making we analyze the viability of different strategies that may potentially increase the robustness of a power system for the case of the european power system we pursue a dedicated analysis with the european power system model limes eu based on a total of more than 40 000 model runs we find that strategies promoting the ability of countries to always produce at least 95 of their electricity demand domestically significantly help to reduce the loss of load in case of shocks such a strategy is not cost optimal for the expected future without shocks but the additional costs about 0 1 of total system costs are low compared to the benefits of significantly increasing the power system s robustness

residential investment and the current account abstract residential investment is an important driving force in the current account this paper first builds the model to show that residential investment for the empirically relevant case where demand for housing services has nonzero income elasticity is fundamentally different from nonresidential investment owing to this income effect the dynamics of housing are subject to the additional integral constraint as well as the standard stock adjustment and euler equations the model is used to examine the effects of changes in government purchases on the tradeable good housing subsidies and productivity shocks on the current account

the clean development mechanism stochastic permit prices and energy investments abstract we analyze the impact on energy investments stemming from different emission permit classes by considering permits that are allocated inside the european emission trading scheme and secondary certified emission reduction scer permits originating from the clean development mechanism one price taking firm which is subject to emission regulation has the choice to invest in gas or wind power plant the firm faces uncertainty regarding stochastically evolving permit prices while it receives a premium on the electricity price for wind energy as a first step we determine the value of the option to invest into a gas power plant over time then we calculate the investment probability of a gas power investment in a range of policy scenarios we find that allowing the usage of scer permits in the present policy framework has a positive impact on gas power investment decoupling the price processes has a similar effect if the quota of scer permits is doubled the decrease in the investment probability for wind power is large we carry out sensitivity tests for different parameter values and find that investment behavior changes significantly with differing interest rates the wind energy premium and volatility

ecology driven real options an investment framework for incorporating uncertainties in the context of the natural environment the role of uncertainty within an organization s environment features prominently in the business ethics and management literature but how corporate investment decisions should proceed in the face of uncertainties relating to the natural environment is less discussed from the perspective of ecological economics the salience of ecology induced issues challenges management to address new types of uncertainties these pertain to constraints within the natural environment as well as to institutional action aimed at conserving the natural environment we derive six areas of ecology induced uncertainties and propose ecology driven real options as a conceptual approach for systematically incorporating these uncertainties into strategic management we combine our results in an integrative investment framework and illustrate its application with the case of carbon constraints

optimal design of subsidy to stimulate renewable energy investments the case of china this paper proposes a real options model for estimating the optimal subsidy for renewable energy power generation project by using stochastic process to describe the market price of electricity co2 price and investment cost two indicators i e project value and threshold value are used to derive the optimal subsidy the least squares monte carlo simulation method is used to solve the model the proposed model is used to empirically evaluate the optimal level of subsidy for solar photovoltaic power generation in china the results show that carbon emission trading scheme helps reduce subsidy unit generating capacity market price of electricity co2 price and the volatility of investment cost are negatively related with subsidy whereas investment cost and the volatility of electricity price and co2 price are positively related with subsidy it is suggested that chinese governments take some measures e g promoting technological progress establishing a nationwide carbon emission trading market promoting the competition in renewable energy industry as well as maintaining the stability of co2 price and electricity price to reduce the required subsidy

influences from the european parliament on eu emissions prices abstract the decisions of the european parliament ep are shown to influence both eu emission allowance eua prices and volatility reductions in price and increases in volatility are observed when ep decisions are i not party political in origin ii made during times of low market sentiment or iii made during times of low market attention daily eua prices from 2007 to 2014 are used in the study with decisions analysed using an event study approach for price impact and a garch specification for volatility impact our findings suggest the need for policymakers to improve communication of long term strategies for the eua market this aims to reduce the evident ongoing uncertainty experienced by traders around each decision made by the ep the finding that sentiment and market attention at the time of an ep decision influences the market s reaction indicates a need to consider market dynamics in terms of decision timing so that market turbulence is not an unintended by product of an ep decision some form of medium term forward guidance may be called for

wind farm investment risks under uncertain cdm benefit in china abstract china has set an ambitious target to increase its wind power capacity by 35 gw from 2007 to 2020 the country s hunger for clean power provides great opportunities for wind energy investors however risks from china s uncertain electricity market regulation and an uncertain energy policy framework mainly due to uncertain clean development mechanism cdm benefits prevent foreign investors from investing in china s wind energy the objectives of this paper are to 1 quantify wind energy investment risk premiums in an uncertain international energy policy context and 2 evaluate the impact of uncertain cdm benefits on the net present values of wind power projects with four scenarios this study simulates possible prices of certified emissions reductions cers from wind power projects project net present values npvs have been calculated the project risk premiums are drawn from different and uncertain cer prices our key findings show that uncertain cdm benefits will significantly affect the project npvs this paper concludes that the chinese government needs revising its tariff incentives most likely by introducing fixed feed in tariffs fits and re examining its cdm granting policy and its wind project tax rates to facilitate wind power development and enable china to achieve its wind energy target

study on carbon capture and storage ccs investment decision making based on real options for china s coal fired power plants in this paper a quadrinomial model based on the theory of real options is developed to evaluate the investment in carbon capture and storage ccs retrofitting for existing coal fired power plants in china uncertainties in carbon price fossil fuel price investment cost and government subsidy are considered an existing typical 600 mw supercritical pulverized coal fired scpc plant is taken as a case study to illustrate the proposed model and the effects of government subsidy under different scenarios on the critical carbon price to invest in ccs are analyzed the results indicate that the real options approach has an advantage over the application of traditional net present value npv method when handling uncertainty and government subsidy has significant effects on reducing critical carbon price for investment in ccs the critical carbon prices are 103 56 rmb ton with 100 subsidy and 217 95 rmb ton without subsidy while the current average carbon price is 85 2 rmb ton this means that the current trading environment is not positive enough to attract investment in ccs retrofitting these conclusions provide theoretical foundation for decision making of ccs investment and related policy making

the dynamic effects of tax policies in a small open economy we develop an intertemporal optimizing model of a small open economy with both durable and nondurable consumption to address the implications of alternative tax policies an increase in lump sum taxes reduces the steady state level of consumption and improves the stock of foreign bonds consistent with empirical evidence durable consumption exhibits initial excess volatility though an increase in the tax on durables increases the demand for nondurables and improves the bond holdings in the steady state an increase in the tax on nondurables has insignificant effects on the stock of foreign bonds and the consumption of durables using quarterly data from the uk and estimating generalized impulse response functions we find empirical support we also calibrate the welfare implications of different tax policies

the effect of long term expansion on the evolution of electricity price numerical analysis of a theoretically optimised electricity market abstract a decision support tool is proposed for optimising the expansion planning of a semi liberalised electricity market whilst the underlying interaction of the generating mix with electricity prices is researched in the long run a nonlinear stochastic programming algorithm is used for handling multiple uncertainties optimising the power sector characteristics both in terms of financial and environmental performance two endogenous models and an exogenous one are analysed and compared the endogenous model results indicate that consumers might benefit by the moderate electricity prices in case the optimal loads and capacity orders are rendered the exogenous model is insensitive to generating mix variations the long term actions suggested for system operators are comprised of the permits issued for new entries they are affected by the evolution of electricity prices since the permits granted for conventional technologies are maintained when their profits are rising the permits granted for renewable technologies are also maintained thus allowing cleaner electricity production to be induced to the grid the optimal bid strategies of generators interact with their dispatching schedule and the diversification of their load curves the relevant bids are primarily driven by the merit order the plants are dispatched in the assigned load levels may be raised in profitable producers so that their profit is maximised they might be restrained instead in case there are no significant prospects for individual profits the lognormal distribution of electricity price results is characterised by increasing variance over time indicating that the model is more robust in the most imminent solutions

robust incentives and the design of a climate change governance regime in building a governance regime to address climate change should we prioritize the development of global institutions or national ones this paper focuses on two neglected characteristics to inform the governance problem the incentives for investment in low carbon energy technology and the influence of historical policy volatility examining a case study of an important low carbon energy technology wind power this study finds 1 policy volatility has been substantial 2 policy changes were uncorrelated across jurisdictions suggesting that 3 investors could have substantially reduced their exposure to the risk of policy volatility by operating globally while it also has downsides a poorly coordinated international policy regime has the advantage of reducing the risk associated with a global policy failure beyond this case study the importance of this positive effect depends on the probability of policy failures in each country the correlations among them and the probability of a global policy failure

chinese companies awareness and perceptions of the emissions trading scheme ets evidence from a national survey in china abstract china announced the launch of a national emissions trading scheme ets in 2017 however companies appear show little enthusiasm for participation in the ets in china this paper identifies the factors affecting companies awareness and perceptions of ets by conducting a national survey based on an online questionnaire from may to november 2015 in seven carbon trading pilots the results indicate that companies attitudes towards the ets are positively influenced by government regulations and policy public relations management and estimated economic benefit of these public relations management is the decisive factor and estimated economic benefit is confirmed to be a relatively weak predictor a company s environmental and energy strategy exerts insignificant effects on its preference for the ets although the sampled companies are very willing to save energy and reduce emissions there exists an inverted u shape relationship between a company s level of mitigation technologies and its attitudes towards the ets the carbon price fails to stimulate companies to upgrade mitigation technologies the majority of companies treat participation in the ets only as a means of improving ties with governments as well as of earning a good social reputation rather than as a cost effective mechanism to mitigate greenhouse gas emissions

policy interactions risk and price formation in carbon markets carbon pricing is an important mechanism for providing companies with incentives to invest in carbon abatement price formation in carbon markets involves a complex interplay between policy targets dynamic technology costs and market rules carbon pricing may under deliver investment due to r d externalities requiring additional policies which themselves affect market prices also abatement costs depend on the extent of technology deployment due to learning by doing this paper introduces an analytical framework based on marginal abatement cost mac curves with the aim of providing an intuitive understanding of the key dynamics and risk factors in carbon markets the framework extends the usual static mac representation of the market to incorporate policy interactions and some technology cost dynamics the analysis indicates that supporting large scale deployment of mature abatement technologies suppresses the marginal cost of abatement sometimes to zero whilst increasing total abatement costs however support for early stage r d may reduce both total abatement cost and carbon price risk an important aspect of the analysis is in elevating risk management considerations into energy policy formation as the results of the stochastic modelling indicate wide distributions for the emergence of carbon prices and public costs around the policy expectations

evaluating the power investment options with uncertainty in climate policy abstract this paper uses a real options approach roa for analysing the effects of government climate policy uncertainty on private investors decision making in the power sector it presents an analysis undertaken by the international energy agency iea that implements roa within a dynamic programming approach for technology investment choice case studies for gas coal and nuclear power investment are undertaken with the model illustrative results from the model indicate four broad conclusions i climate change policy risks can become large if there is only a short time between a future climate policy event such as post 2012 and the time when the investment decision is being made ii the way in which co 2 and fuel price variations feed through to electricity price variations is an important determinant of the overall investment risk that companies will face iii investment risks vary according to the technology being considered with nuclear power appearing to be particularly exposed to fuel and co 2 price risks under various assumptions and iv the government will be able to reduce investors risks by implementing long term say 10 years rather than short term say 5 years climate change policy frameworks contributions of this study include 1 having created a step function with stochastic volume of jump at a particular time to simulate carbon price shock under a particular climate policy event 2 quantifying the implicit risk premium of carbon price uncertainty to investors in new capacity 3 evaluating carbon price risk alongside energy price risk in investment decision making and 4 demonstrating roa to be a useful tool to quantify the impacts of climate change policy uncertainty on power investment

optimal feed in tariff for solar photovoltaic power generation in china a real options analysis abstract the feed in tariff policy is widely used to promote the development of renewable energy china also adopts feed in tariff policy to attract greater investment in solar photovoltaic power generation this study employs real options method to assess the optimal levels of feed in tariffs in 30 provinces of china the uncertainties in co 2 price and investment cost are considered a method that integrates the backward dynamic programming algorithm and least squares monte carlo method is used to solve the model the results demonstrate that the feed in tariffs of 30 provinces range from 0 68 rmb kwh to 1 71 rmb kwh and the average level is 1 01 rmb kwh on this basis we find that the levels of sub regional feed in tariff announced in 2013 are no longer appropriate and should be adjusted as soon as possible we have also identified the implications of technological progress and carbon emission trading schemes as well as the importance of strengthening electricity transmission it has been suggested that the chinese government takes diverse measures including increasing research and development investment establishing and improving a nationwide carbon emission trading scheme and accelerating the construction of electricity transmission infrastructure to reduce the required feed in tariff and promote the development of solar photovoltaic power generation

analyzing nutritional impacts of price and income related shocks in malawi simulating household entitlements to food the 2007 2008 food price crisis and the following global economic recession has temporarily increased the number of people to suffer from hunger while the impacts can be measured with precision only ex post for policy makers it is critical to get a sense of likely impacts ex ante in order to plan approaches to mitigate these impacts in this paper we adopt a very simple micro based simulation approach to analyze how changes in prices of specific food groups such as maize prices or prices for staple foods as well as how negative short term household level income shocks affect the entitlements to calorie consumption of individuals and how these changes affect overall food poverty we illustrate our approach using household survey data from malawi we find that food poverty is of serious concern with large within country variations we find that price shocks for staple foods have a considerable impact on food security with particularly strong effects on poor net food buyers in rural and urban areas this paper demonstrates that it is possible to estimate food security impacts of price and income shocks ex ante in a relatively straightforward fashion that can be done relatively quickly and that is suitable for cross country assessments of the likely impacts of shocks on food security and the design of appropriate response measures

durability in consumption and the dynamics of the current account abstract in a model with durable goods and ricardian production technology an increase in government expenditure increases the steady state level of employment and reduces consumption the country runs a current account surplus the two factor model with costly investment akin to turnovsky and sen oxford econom pap 43 1991 1 confirms all the basic results of the simple model except for the current account balance the increase in capital has a negative effect whereas a decrease in the stock of consumer durables has a positive effect on the purchase of foreign bonds thus creating an ambiguous effect on the current account balance moreover the current account will likely exhibit non monotonic adjustment

inflation stabilisation and the consumption of durable goods exchange rate based stabilisations in chronic inflation countries have often been characterised by an initial consumption boom which is most evident in the behaviour of durable goods followed by a later contraction this paper provides an explanation for such a boom recession cycle based on the timing of purchases of durable goods the initial fall in inflation results in a wealth effect which induces many consumers to bring forward their purchases of durable goods thus generating an aggregate consumption boom since most consumers replenish their stock of durable goods at the beginning of the programme a later slowdown follows

structural breaks and electricity prices further evidence on the role of climate policy uncertainties in the australian electricity market the primary objectives and the strategies of a national electricity market are the efficient delivery of network services and the electricity infrastructure to meet the long term consumer s interests therefore the objective of this study is to explore whether electricity prices across the six australian states display instability such instability is closely associated with the presence of structural breaks in relevance to policy events on australian carbon policies the study makes use of weekly australian wholesale electricity prices spanning the period from june 8th 2008 to march 30th 2014 along with linear and non linear unit root testing methodologies the results provide supportive evidence that the australian electricity market can be described as a less stable electricity market which implies that a high degree of market power is exercised by generators across regional markets these findings are expected to have substantial consequences for the effectiveness of carbon dioxide mitigating policies especially when there is uncertainty as to whether the planned environmental policy is put in place for the lifespan of undertaken investments