some design lessons from market based greenhouse gas regulation in the restructured australian electricity industry abstract there is growing worldwide interest in the use of market based policy instruments for climate change regulation in the electricity sector these mechanisms would seem to offer some efficiency and flexibility advantages over more traditional regulatory approaches while being highly compatible with competitive market based electricity industries australia has been an early and enthusiastic adopter of both electricity industry restructuring and market based environmental instruments this paper first outlines some of these recent policy developments in particular we describe the objectives design and outcomes to date of electricity industry restructuring the mandatory renewable energy target the nsw greenhouse benchmarks the queensland 13 gas scheme and government accredited green power from this we draw some key design lessons for such market based instruments these include the perils of abstraction in scheme design the vital importance of setting appropriate baselines in baseline and credit schemes the possibility that such measures may interact in ways that reduce their environmental effectiveness market for lemon risks with tradable instruments that have measurement verification or additionality difficulties and the challenges of creating transparent liquid markets for these mechanisms the mixed performance of these australian schemes to date illustrates the need for great care in designing such market based approaches

unemployment and effort at work we measure the sensitivity of work effort to local labour market conditions using self reported non work at the workplace in the american time use survey atus 2003 12 non work at work is quantitatively significant and varies positively with local unemployment but in opposite directions at the extensive and intensive margins the fraction of workers reporting positive values declines with unemployment while time spent in non work conditional on any such time rises with unemployment the results speak to issues of labour hoarding efficiency wages and the cyclicality of labour productivity we also demonstrate a relationship between the incidence of non work and unemployment benefits in state data linked to the atus there are also pronounced occupational differences in the incidence and intensity of non work

impacts of wind and solar spatial diversification on its market value a case study of the chilean electricity market abstract renewable energy is expected to become the main electricity source in the world in the coming decades with solar and wind power taking a big share of the energy supply although there has been a remarkable advance on renewable energy technologies their integration is still difficult for regulators market designers and system operators due to the high variability and limited predictability of solar and wind resources measures can be adopted to ease their integration among them geographical diversification there is plenty of literature about the diversification of solar and wind resources and there is a common conclusion greater dispersion smooths out power production however literature on the effects of spatial diversification on the power system electricity prices and renewable energy market value is much scarcer this paper studies the effects of spatial diversification and questions whether integration policies are incentivizing the placement of renewable generators where they provide the highest value to the electricity system in chile using real data and a simplified dispatch model the analysis presented shows evidence of the effects of diversification on wind and solar market value in chile results suggest that spatial diversification has a strong positive effect on the market value of renewable energy especially in scenarios with active transmission and hydro storage constraints wind market value may vary up to us 10 mw h depending on the level of diversification and the spatial and temporal constraints of the system and given current storage capacity of hydro reservoirs the solar market value may increase us 5 mw h due to diversification if transmission capacity is enough even though these results must be observed with caution because they depend on the assumptions made there is an important effect of renewable spatial diversification that should be observed by regulators

on the price of recreation goods as a determinant of male labor supply we examine whether and how variations in the price of recreation goods influence men s allocation of market work for the united states individual level data are combined with metropolitan area level price indices to estimate the male elasticity of intertemporal substitution of market work with respect to the price of recreation goods which is found around 0 16 and statistically significant the allocation of market work in response to changes in the price of recreation goods would create movements in the output of an economy moreover it could contribute toward explaining the emerging differences in work and leisure between the united states and europe

the impact of wind power generation on the electricity price in germany abstract this paper investigates the relationship between intermittent wind power generation and electricity price behaviour in germany using a garch model i evaluate the effect of wind electricity generation on the level and the volatility of the electricity price in an integrated approach the results show that variable wind power reduces the price level but increases its volatility this paper s results also indicate that regulatory change has stabilised the wholesale price the electricity price volatility has decreased in germany after a modification of the marketing mechanism of renewable electricity this gives confidence that further adjustments to regulation and policy may foster a better integration of renewables into the power system

labor supply elasticities overcoming nonclassical measurement error using more accurate hours data we measure the impact of measurement error in labor supply elasticities estimated over recalled usual work hours as is ubiquitous in the literature we employ data on hours of work in diaries collected by the american time use survey 2003 2015 along with the same respondents recalled usual work hours estimates using the latter yield elasticities that are positively biased we argue that this bias arises from the salient effects of differences in wage rates on recalled hours abstract from author

liquidity protection versus moral hazard the role of the imf abstract a game between the imf a country and atomistic private investors is motivated by recent crises including that in argentina the one stage game has no nash equilibrium in pure strategies considering an equilibrium in mixed strategies conditions are derived on whether the imf should exist a cooperative first best may be supported in a repeated game by a minimum punishment strategy but breaks down as the probability of insolvency rises countries are likely to deviate in bad times placing the imf in an impossible position the international financial architecture ifa remains incomplete

slovak electricity market and the price merit order effect of photovoltaics abstract this paper analyses slovak electricity market with a focus on photovoltaic energy it evaluates the impact of the solar electricity penetration into electricity mix on spot prices seeks evidence of the merit order effect in the slovak electricity market and quantifies it based on hourly data the multivariate regression analysis covers the period 2011 2016 the rather small merit order effect estimated by an ols time series model leads to the small decrease of slovak electricity wholesale prices this spot price reduction attributable to the photovoltaics does not outweigh the costs of the support scheme borne by end users what implies a consumer loss

renegotiation collective action clauses and sovereign debt markets abstract collective action clauses cacs are provisions specifying that a supermajority of bondholders can change the terms of a bond we study how cacs determine governments fiscal incentives sovereign bond prices and default probabilities in environments with and without contingent debt and imf presence we claim that cacs are likely to be an irrelevant dimension of debt contracts in current sovereign debt markets because of the variety of instruments utilized by sovereigns and the implicit imf guarantee nonetheless under a new international bankruptcy regime like that recently proposed by the imf cacs can increase significantly the cost of borrowing for sovereigns contrary to what is suggested in previous empirical literature

hares and stags in argentinean debt restructuring abstract the latest argentinean debt restructuring was the first time the resolution of a modern financial crisis was completely handed over to the private financial markets without official intervention by public institutions we argue that the resulting harshest haircut for private creditors in history can be at least partially related to a stag hunt game played by creditors we show that incentive schemes provided by the argentinean government were factors facilitating this haircut the analysis suggests that contrary to the recognition in the literature the effects of collective action clauses and exit consents within a restructuring process are not equal in the case of argentina the inclusion of collective action clauses in the defaulted bonds could have benefited the holdout creditors

the life cycle profile of time spent on job search using time use survey data we document a hump shaped profile of job search time in the united states across the life cycle the middle aged unemployed spend roughly three times as much time in job search as the youngest group of unemployed the hump shaped profile of job search time is relatively stable across demographic groups however the profile of job search time appears to be declining in non us countries we discuss how standard life cycle models with incomplete markets have difficulty in accounting for the hump shaped profile found in the us data

high penetration wind generation impacts on spot prices in the australian national electricity market this paper explores wind power integration issues for the south australian sa region of the australian national electricity market nem by assessing the interaction of regional wind generation electricity demand and spot prices over 2 recent years of market operation sa s wind energy penetration has recently surpassed 20 and it has only a limited interconnection with other regions of the nem as such it represents an interesting example of high wind penetration in a gross wholesale pool market electricity industry our findings suggest that while electricity demand continues to have the greatest influence on spot prices in sa wind generation levels have become a significant secondary influence and there is an inverse relationship between wind generation and price no clear relationship between wind generation and demand has been identified although some periods of extremely high demand may coincide with lower wind generation periods of high wind output are associated with generally lower market prices and also appear to contribute to extreme negative price events the results highlight the importance of electricity market and renewable policy design in facilitating economically efficient high wind penetrations

can short term capital controls promote capital inflows abstract in an economy a la diamond and dybvig j polit econ 91 3 1983 401 we present an example in which foreign lenders find it profitable to invest in an emerging market if and only if the emerging market government imposes taxes on short term capital inflows this implies that capital controls that are effective in reducing the vulnerability of emerging markets to financial crises may increase the volume of capital inflows

unique equilibrium in a model of self fulfilling currency attacks even though self fulfilling currency attacks lead to multiple equilibria when fundamentals are common knowledge we demonstrate the uniqueness of equilibrium when speculators face a small amount of noise in their signals about the fundamentals this unique equilibrium depends not only on the fundamentals but also on financial variables such as the quantity of hot money in circulation and the costs of speculative trading in contrast to multiple equilibrium models our model allows analysis of policy proposals directed at curtailing currency attacks

drivers of electricity price dynamics comparative analysis of spot and futures markets abstract against the backdrop of numerous evidence that variable renewable generation decreases electricity prices and increases price volatility this paper assesses the drivers of electricity prices in spot and futures markets focusing on the german electricity markets we take into account nonlinearities in electricity prices by means of structural breaks and threshold regressions we find that short run and medium long run price drivers differ and more importantly that they vary over time in the case of the spot market the determinants of prices are renewable infeed and electricity demand while in the futures market the main drivers are natural gas coal and carbon prices our results give relevant insights for market participants who seek to optimize procurement selling strategies in the spot market and use the futures market to hedge against spot price volatility which has increased due to a higher renewable generation

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

data watch the american time use survey we discuss the new american time use survey atus an on going household survey of roughly 1 200 americans per month 1 800 per month in the first year 2003 that collects time diaries as well as demographic interview information from respondents who had recently been in the current population survey the characteristics of the data are presented as are caveats and concerns that one might have about them a number of novel uses of the atus in economic research including in the areas of macroeconomics national income accounting labor economics and others are proposed to illustrate the magnitude of this new survey s possible applications

co ordination failure moral hazard and sovereign bankruptcy procedures we study a model of sovereign debt crisis that combines problems of creditor co ordination and debtor moral hazard solving the sovereign debtor s incentives leads to excessive rollover failure by creditors when sovereign default occurs we discuss how the incidence of crises might be reduced by international sovereign bankruptcy procedures involving contractibility of sovereign debtor s payoffs suspension of convertibility in a discovery phase and penalties in case of malfeasance in relation to the current debate this is more akin to the imf s sovereign debt restructuring mechanism than the collective action clauses promoted by others

bail out or work out theoretical considerations this paper assesses various crisis resolution proposals using a theoretical model of liquidity and solvency crisis the model suggests that payments standstills and last resort lending are an equally efficient means of dealing with liquidity crises while coordinated lending through creditor committees is second best debt write downs are preferred to subsidised imf financing when dealing with solvency crises because of the negative moral hazard implications of the latter tool finally the model suggests that international bankruptcy court proposals may be superior to existing contractual approaches in securing such write downs on many measures the incidence of international financial crises increased in the last part of the twentieth century bordo et al 2001 but it is not just the incidence of financial crises that has altered in recent years so too has their nature the recent crises in mexico across south east asia russia brazil turkey and argentina were clearly rooted in the capital rather than current account of the balance of payments we appear to have entered an era of capital account crises imf 2002 theoretical models of financial crisis have developed in lockstep with crisis experience a third generation of models of financial crisis has emerged chang and velasco 1998 krugman 1999 these models combine imperfections in fundamentals as suggested by so called first generation models and fragility in expectations as suggested by second generation models to explain crises under the third generation approach capital account crises can originate in either fundamentals or expectations we have solvency as well as liquidity capital account crises

income wages and household production theory abstract with the american time use survey 2003 15 we show that both non workers and workers with higher household incomes spend less time on two quantitatively important time intensive activities sleep and tv watching this finding cannot be explained by the standard becker 1965 commodity production model we modify that model to allow both substitution between time and goods in household production and substitution among commodities in utility functions which rationalizes these results and suggests a way forward for empirical work on household behavior

distinguished lecture on economics in government what we don t know could hurt us some reflections on the measurement of economic activity the routine production of u s economic statistics dates back to the early part of the twentieth century but in recent decades as services output has continued to expand a system of economic statistics that had been designed during the manufacturing era began to seem increasingly outdated over the past decade the statistical agencies have done yeoman work to expand the availability and quality of service sector statistics but the task is far from completed moreover the traditional accounting framework for economic statistics has focused almost exclusively on market transactions looking ahead more comprehensive measurement of productive activities however they may be organized must be a priority

sovereign debt restructuring the judge the vultures and creditor rights what role did the us courts play in the argentine debt swap of 2005 what implications does this have for the future of creditor rights in sovereign bond markets the judge in the argentine case has it appears deftly exploited creditor heterogeneity between holdouts seeking capital gains and institutional investors wanting a settlement to promote a swap with a supermajority of creditors our analysis of argentine debt litigation reveals a judge mediated sovereign debt restructuring which resolves key issues of transition and aggregation two of the tasks envisaged for the imf s stillborn sovereign debt restructuring mechanism for the future we discuss how judge mediated sovereign debt restructuring together with creditor committees could complement collective action clauses in sovereign bond contracts

the effects of wind generation capacity on electricity prices and generation costs a monte carlo analysis abstractwe use monte carlo analysis to examine the potential of increased renewable generation to provide a hedge against variability in energy prices and costs fuel costs electricity demand and wind generation are allowed to vary and a unit commitment and economic dispatch algorithm is employed to produce cost minimizing generation schedules under different levels of installed wind capacity increased wind capacity reduces the mean and the variance of production costs but only the variance of electricity prices wind generators see their market revenues increase while consumer payments and fossil generator profits do not considerably vary as wind capacity increases risk aversion is captured by considering the conditional value at risk for both consumers and producers the optimal level of wind generation increases as risk aversion increases due to the potential of wind to act as a hedge against very high electricity prices in high fuel price scenarios

time use and labor productivity the returns to sleep abstract we investigate how the largest use of time sleep affects productivity time use data from the united states allow us to test a model in which sleep improves productivity consistent with t

does strengthening collective action clauses cacs help does improving creditor coordination by strengthening cacs lead to efficiency gains in the functioning of sovereign bond markets we address this question in a model featuring both debtor moral hazard and creditor coordination under incomplete information conditional on default we characterize the interim efficient cac threshold and show that strengthening cacs away from unanimity results in interim welfare gains however once the impact of strengthening cacs on debtor s incentives is taken into account we demonstrate the robust possibility of a conflict between ex ante and interim efficiency we calibrate our model to quantify such a welfare trade off and discuss the policy implications of our results

impact of renewables on electricity markets do support schemes matter abstract rising renewable shares influence electricity markets in several ways among others average market prices are reduced and price volatility increases therefore the missing money problem in energy only electricity markets is more likely to occur in systems with high renewable shares nevertheless renewables are supported in many countries due to their expected benefits the kind of support instrument can however influence the degree to which renewables influence the market while fixed feed in tariffs lead to higher market impacts more market oriented support schemes such as market premiums quota systems and capacity based payments decrease the extent to which markets are affected this paper analyzes the market impacts of different support schemes for this purpose a new module is added to an existing bottom up simulation model of the electricity market in addition different degrees of flexibility in the electricity system are considered a case study for germany is used to derive policy recommendations regarding the choice of support scheme

reducing the market impact of large shares of intermittent energy in denmark abstract the increasing prevalence of renewable and intermittent energy sources in the electricity system is creating new challenges for the interaction of the system in denmark high renewable shares have been achieved without great difficulty mainly due to the flexibility of the nearby nordic hydro power dominated system further increases in the share of renewable energy sources require that additional options are considered to facilitate integration with the lowest possible cost with large shares of intermittent energy the impact can be observed on wholesale prices giving both lower prices and higher volatility a lack of wind that causes high prices is rarely seen because long periods without wind are uncommon therefore we focus on the low price effects and the increased value of flexible demand options on the supply side there is an increase in the value of other flexible generation technologies and the attractiveness of additional interconnection capacity this paper also analyses options for increasing the flexibility of heat generation involving large and decentralized chp plants and heat generation based on electricity the incentives that the market provides for shifting demand and using electricity for heat production are discussed based on the variability of prices observed from 2006 to 2008

assessing the impact of wind generation on wholesale prices and generator dispatch in the australian national electricity market abstract growing climate change and energy security concerns are driving major wind energy deployment in electricity industries around the world despite its many advantages growing penetrations of this highly variable and somewhat unpredictable energy source pose new challenges for electricity industry operation one issue receiving growing attention is the so called merit order effect of wind generation in wholesale electricity markets wind has very low operating costs and therefore tends to displace higher cost conventional generation from market dispatch reducing both wholesale prices and conventional plant outputs this paper extends the current literature on this effect through an empirical study employing a range of econometric techniques to quantify the impacts of growing wind penetrations in the australian national electricity market nem the results suggest that wind is having a marked impact on spot market prices and while wind is primarily offsetting higher operating cost gas generation it is now also significantly reducing dispatch of emissions intensive brown coal generation great care needs to be taken in extrapolating these results to longer term implications however the study does propose a methodology for assessing this effect highlights the impacts that wind is already having on nem outcomes and suggests promising directions for future research

higher wages less gym time the effects of minimum wages on time use this study examines the effects of minimum wages on time use analyzing data from the american time use survey from 2003 to 2017 i investigate the role of time allocated towards exercise and other health enhancing activities as a potential mechanism underlying the link between minimum wages and health the study finds that a 1 increase in minimum wages is associated with reductions in exercising and total personal health time by 13 and 20 minutes during the week respectively this decline in health time is fully reallocated toward additional leisure time the results are largely driven by males and employed individuals

is renewable energy a cost effective mitigation resource an application to the spanish electricity market abstract this paper evaluates the net effect of renewable energy policy in spain from 2002 to 2017 and calculates its cost effectiveness in terms of co2 emission reductions in the production of electricity our conclusions indicate that although the phasing out of feed in tariffs reduced the regulatory costs it also limited renewable participation in the electricity market leading to an increased electricity price and higher emissions according to our results the joint effect of i the value of avoided emissions due to renewable energy participation and ii the merit order effect was able to compensate for the regulatory costs subsidies up until 2010 while the sign of the net effect was reversed from 2011 to 2017 finally we find that the economic implications of emission reductions are highly dependent on how the social cost of carbon is measured

how does market power affect the impact of large scale wind investment in energy only wholesale electricity markets in the short run it is well known that increasing wind penetration is likely to reduce spot market electricity prices due to the merit order effect the long run effect is less clear because there will be a change in new capacity investment in response to the wind penetration in this paper we examine the interaction between capacity investment wind penetration and market power by first using a least cost generation expansion model to simulate capacity investment with increasing amounts of wind generation and then using a computer agent based model to predict electricity prices in the presence of market power we find the degree to which firms are able to exercise market power depends critically on the ratio of capacity to peak demand for our preferred long run generation scenario we show market power increases for some periods as wind penetration increases however the merit order counteracts this with the results that prices overall remain flat returns to peakers increase significantly as wind penetration increases the market power in turn leads to inefficient dispatch which is exacerbated with large amounts of wind generation

loafing or learning the demand for informal education abstract using detailed time use data for germany a positive correlation is found between the level of schooling and time investments in informal education two hypotheses explain this observation 1 highly educated people have higher opportunity costs of their leisure time and thus prefer leisure activities which add to their market productivity wage effect and 2 highly educated people have a preference for high quality leisure taste effect the demand for informal education is derived in a household production model accounting for both explanations an empirical investigation finds evidence for both effects with the taste effect being more important

synchronization of work schedules why do people work intermittently and why do they synchronize their work schedules a group of interacting workers who differ in tastes is analyzed a lifetime labor supply model is developed which combines tiring rhythmic changes in the environment and interactions among workers arising from communication and coordination a multiplicity of synchronized equilibria arises these equilibria can be ranked according to the length of the work period equilibria with longer hours are preferred by all workers in the group the worker with the highest aversion to work sets the standard and others conform to him copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

time use during the great recession using data from the american time use survey between 2003 and 2010 we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies leisure absorbs roughly 50 percent of foregone market work hours with sleeping and television watching accounting for most of this increase we document significant increases in time spent on shopping child care education and health job search absorbs between 2 and 6 percent of foregone market work hours we discuss the implications of our results for business cycle models with home production and non separable preferences jel codes d13 e32 j22

cyclical variation in labor hours and productivity using the atus we examine monthly variation in weekly work hours using data for 2003 10 from the current population survey cps on hours worker from the current employment survey ces on hours job and from the american time use survey atus on both the atus data minimize recall difficulties and constrain hours of work to accord with total available time the atus hours worker are less cyclical than the cps series but the hours job are more cyclical than the ces series we present alternative estimates of productivity based on atus data and find that it is more pro cyclical than other productivity measures

stressed out on four continents time crunch or yuppie kvetch social commentators have pointed to the problems of citizens of industrialized countries especially working women who face time stress an absence of sufficient time to accomplish all their tasks an economic theory views time stress as an increasing function of the shadow price of time and suggests it will be more prevalent in households with higher incomes and whose members work longer in the market or on required homework evidence from microeconomic data sets for australia germany korea and the united states corroborates this view adults in higher income households perceive more time stress in the united states a move from the 25 th to the 75 th percentile of the income distribution raises time stress by half as much as an interquartile change in weekly market work the relative effects of increased income compared to increased market work are larger in germany smaller in australia and roughly the same in korea time stress is part time crunch but much is also part yuppie kvetch

aggregate impacts of a gift of time lee jungmin kawaguchi daiji hamermesh daniel s december 2011 aggregate impacts of a gift of time reports cambridgenational bureau of economic research nber working paper series 17649 33

a structural model of the fixed time costs of market work abstract we link atus 2003 04 to march cps data and examine market work s effects on non market activity in a structural model fixed time costs of work generate a utility equivalent of 8 of income to be overcome before working becomes optimizing

how family status and social security claiming options shape optimal life cycle portfolios we show how optimal household decisions regarding work retirement saving portfolio allocations and life insurance are shaped by the complex financial options embedded in u s social security rules and uncertain family transitions our life cycle model predicts sharp consumption drops on retirement an age 62 peak in claiming rates and earlier claiming by wives versus husbands and single women moreover life insurance is mainly purchased on men s lives our model which takes social security rules seriously generates wealth and retirement outcomes that are more consistent with the data in contrast to earlier and less realistic models

the mexican peso crisis sudden death or death foretold abstract we argue that allowing for the possibility of a self fulfilling panic helps to understand several features of the recent mexican crisis self fulfilling expectations became decisive in generating a panic only after the government ran down gross reserves and ran up short term dollar debt we present a simple model to explain how and why multiple equilibria can occur for some levels of reserves or debt but not for others lastly we argue that the imperfect credibility of mexican exchange rate policy made it advisable to follow more contractionary fiscal and monetary policies in 1994 our model formalizes the reasons why this is so

foreign law bonds can they reduce sovereign borrowing costs abstract governments often issue bonds in foreign jurisdictions which can provide additional legal protection vis a vis domestic bonds this paper studies the effect of this jurisdiction choice on bond prices we test whether foreign law bonds trade at a premium compared to domestic law bonds we use the euro area 2006 2013 as a unique testing ground controlling for currency risk liquidity risk and term structure foreign law bonds indeed carry significantly lower yields in distress periods and this effect rises as the risk of a sovereign default increases these results indicate that in times of crisis governments can borrow at lower rates under foreign law

collective action clauses in international sovereign bond contracts whence the opposition in the debate on strengthening the international financial architecture which peaked in 2002 after a series of emerging market sovereign debt crises the universal adoption of collective action clauses cacs was the most promising reform proposal academics and the official sector had been promoting cacs at least since 1995 yet market practice did not begin to change until 2003 this delay is often attributed to the opposition of investors and sovereign borrower to cacs this paper evaluates the publicly stated as well as the suspected private motives of the two sides to block the spread of cacs it draws on a wide range of existing evidence and adds some new theoretical considerations to show that there is no reason to be sceptical of cacs unless bailouts exist as an alternative crisis resolution mechanism this conclusion may be of interest purely for the sake of historical accuracy but more importantly it may help to better understand any potential future resistance by market participants e g in the process of introducing cacs in bonds governed by german law

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

sovereign liquidity crises the strategic case for a payments standstill is sovereign borrowing so different from corporate debt that there is no need for bankruptcy style procedures to protect debtors with the waiver of immunity sovereign debtors who already face severe disruption from short term creditors grabbing their currency reserves are also exposed to litigious creditors trying to seize what assets they can in a race of the vultures shielding sovereign debtors from inter creditor conflict by authorised standstills on payments doubt less runs some risk of debtor s moral hazard but the lack of an orderly procedure for resolving sovereign liquidity crises means that the imf is de facto forced to bail out countries in trouble this leads to both debtor and creditor moral hazard as investors lend without monitoring knowing that their investments are essentially guaranteed the strategic case for legalising standstills is to rescue the international financial system from this time consistent trap

revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in australia this paper investigates the effect of increasing the number of wind turbine generators on wholesale spot prices in the australian national electricity market s nem given the existing transmission grid from 2014 to 2025 we use a sensitivity analysis to evaluate the effect of five different levels of wind power penetration on prices ranging from scenario a no wind to scenario e that includes existing and planned wind power sufficient to meet australia s original 2020 41twh large scale renewable energy target lret we find divergence in prices between states and similar prices for nodes within states this supports the garnaut climate change review assessment on the prevalence of gold plating the intrastate transmission network and underinvesting in interstate connectivity we find that increasing wind power penetration decreases wholesale spot prices but that retail prices have increased in deregulated south australia and queensland similarly in victoria we argue that there is a pressing need to split the large generator retail companies into separate retail and generator companies and to reassess regulatory rules more generally interconnector congestion limits the potential for wind power to further reduce wholesale prices across the nem so the need for a high capacity transmission backbone in the nem is becoming clearer and will become pressing when australia moves beyond its current 2020 lret

international bailouts moral hazard and conditionality international bailouts the imf s role the large international bailouts of the 1990s have been criticized for generating moral hazard at the expense of the global taxpayer we argue that this criticism is misleading because international bailouts create no or very few costs to the international community instead the problem is to ensure that bailouts are not used to facilitate bad domestic policies thus creating moral hazard at the expense of domestic taxpayers this may require a shift towards ex ante conditionality in the sense that the availability and size of official crisis lending need to be conditional on government policies before the crisis olivier jeanne and jeromin zettelmeyer

the effect of wind and solar power forecasts on day ahead and intraday electricity prices in germany abstract this study analyzes the effects of wind and solar power generation forecasts on electricity prices converse to the existing empirical literature in this area we apply a panel data analysis to control for endogeneity due to unobserved heterogeneity we use a dataset with 24 daily observations of day ahead and intraday prices from 2010 to 2016 and we apply a fixed effects regression under consideration of robust driscoll kraay standard errors a noteworthy element of the regression model is the simulation based design of a variable indicating the power generation technology that is price determining at a certain point in time in this context we differentiate between the fuel types coal gas and others to model the nonlinear price behavior for a varying demand for 2016 we find price dampening effects of both wind and solar power of approximately 0 6 mwh per additional gwh of feed in along with the rapidly increasing shares of wind and solar power of the total power generation during the last years their price dampening effect has declined since 2013 due to a drop in fuel prices another finding is that a reduction in forecasting errors on the power generation from wind and solar and smoothing of the cyclical demand would lead to a decreased price volatility

estimates of a labour supply function using alternative measures of hours of work abstract depending on the data source estimates of hours of work give widely different results both as to level and change in this study three alternative measures of hours worked are used to estimate a simple labor supply function to investigate if the estimated wage rate and income effects are data dependent as well the measures used include those from time use surveys and from labor force surveys the latter are based on the responses to a question about normal weekly hours of market work the results suggest that the estimates of the wage rate effects become much smaller when measures of normal hours are used compared to data collected for a well defined time period close to the date of interview such as time use data the income effects appear less sensitive to the choice of data

the fiscal theory of the price level a critique abstract this paper argues that the fiscal theory of the price level ftpl has feet of clay the source of the problem is a fundamental economic misspecification the ftplconfuses two key building blocks of a model of a market economy budgetconstraints which must be satisfied identically and market clearing or equilibriumconditions the ftpl asssumes that the government s intertemporal budgetconstraint needs to be satisfied only in equilibrium this economic misspecification has far reaching implications for the mathematicalproperties of the equilibria supported by models that impose the structure of theftpl it produces a rash of contradictions and anomalies jel classifications e31 e41 e51 e52 e62 e63 key words fiscal theory of the price level ricardian fiscal financial monetaryprogrammes government budget constraint price level indeterminacy author willem h buiter european bank for reconstruction and development oneexchange square london ec2a 2jn uktel 44 20 73386805fax 44 20 73386110 6111e mail buiterw ebrd comweb page http www nber org wbuiter index htm

wind storage interconnection and the cost of electricity generation abstract we evaluate how increasing wind generation affects wholesale electricity prices balancing payments and the cost of subsidies using the irish single electricity market sem as a test system with hourly data from 1 january 2008 to 28 august 2012 we model the spot market using a system of seemingly unrelated regressions sur where the regressions are the 24 hours of the day wind has a negative impact on the system marginal price with every mwh increase in wind generation equal to about 0 2 of the average wind generation in our sample leading to a decrease of the system marginal price of 0 018 mwh or about 0 3 of its average value we use time series models to analyse the balancing market and show that wind generation increases balancing payments as do the forecast errors of demand and wind every mwh of additional wind generation is associated with an increase in constraint payments of 3 2 or about 0 01 lack of storage increases the impact of wind on balancing payments whereas the lack of interconnection has no effect overall wind decreases costs through its effect on the electricity price more than it increases constraint payments even when storage is on outage the effect of wind remains positive after including the cost of subsidies given to wind generation

the effect of wind and solar power generation on wholesale electricity prices in australia abstract our paper investigates the effect of wind and utility scale solar electricity generation on wholesale electricity prices in australia over 2010 2018 we use both high frequency 30 min and daily datasets for the australian national electricity market nem we estimate autoregressive distributed lag models ardl to decompose the merit order effect of wind and utility scale solar pv generation over time and across states we find that an extra gw of dispatched wind capacity decreases the wholesale electricity price by 11 aud mwh at the time of generation while solar capacity by 14 aud mwh the daily merit order effect is lower we show that the wind merit order effect has been increasing as a function of dispatched wind capacity over time despite of this wholesale electricity prices in australia have been increasing predominantly driven by the increase in natural gas prices our findings further strengthen the evidence of the merit order effect of renewable energy sources with important implications for the current energy policy debate in australia

unemployment market work and household production time diary data from four countries suggest that differences in market time between the unemployed and employed represent additional leisure not increased household production in areas where unemployment is cyclically high however reduced market work is offset by additional home production

sovereign debt as intertemporal barter author s kletzer kenneth m wright brian d abstract borrowing and lending between sovereign parties is modeled as intertemporal barter that smoothes the consumption of a risk averse party subject to endowment shocks the surplus anticipated in the relationship offers sufficient incentive for cooperation by all parties including any other competitive agents who are potential lenders to the sovereign the sole punishments consist of renegotiation proof changes in the path of future payments we show that intertemporal trade can be sustained in the absence of any exogenous enforcement of lending relationships whatsoever that is borrowing and lending are possible under anarchy and are supported by punishments that consist of cheating any cheater long term implicit relationships may be fulfilled as the continual renegotiation of simple incomplete short term loans the analysis suggests that the crucial role of the explicit loan contract is the identification of the relationship and the parties involved

germany s nuclear power plant closures and the integration of electricity markets in europe this paper examines the potential implications of national policies that lead to a sudden increase of wind power in the electricity mix for interconnected european electricity markets more specifically it examines market integration before and after the closures of eight nuclear power plants that occurred within a period of a few months in germany during 2011 the short and long run interrelationships of daily electricity spot prices from november 2009 to october 2012 in apx endex belpex epex de epex fr nordpool omel and swissix and wind power in the german system are analysed two mgarch multivariate generalized autoregressive conditional heteroscedasticity models with dynamic correlations are used to assess spot market behaviour in the short run and a fractional cointegration analysis is conducted to investigate changes in the long run behaviour of electricity spot prices results show positive time varying correlations between spot prices in markets with substantial shared interconnector capacity a negative association between wind power penetration in germany and electricity spot prices in the german and neighbouring markets and for most markets a decreasing speed in mean reversion

u s climate policy and the regional economics of electricity generation abstract we examine the interaction between price competition and policy in four iso markets by modeling the economic dispatch of generation technologies and the evolution of generation resources over a fifteen year period beginning in 2016 using a representative range of forward prices for natural gas and other generator costs we model three potential pathways for federal policy 1 the status quo which assumes no new federal initiatives through 2031 2 moderate and aggressive national or regional rpss and 3 carbon taxes that vary in timing and amount the model assesses the impact of these policies on competition between electricity generators using a range of output variables including the cost of electricity emissions of carbon dioxide co2 retirement and construction trends for generation resources and dispatch rates of generation technologies we analyze conditions in four regional electricity markets with distinct starting generation portfolios demand profiles that differ seasonally and diurnally wind and solar resources and fuel costs our results provide new insights into the competitive barrier that low gas prices represent for renewables the superior efficacy of carbon taxes even at low rates over rpss and the singular competitive advantage renewables enjoy by virtue of having near zero marginal costs

electricity market design for facilitating the integration of wind energy experience and prospects with the australian national electricity market abstract australia has been an early and enthusiastic adopter of both electricity industry restructuring and market based environmental regulation the australian national electricity market nem was established in 1999 and australia also implemented one of the world s first renewable energy target schemes in 2001 with significant recent growth in wind generation australia provides an interesting case for assessing different approaches to facilitating wind integration into the electricity industry wind project developers in australia must assess both potential energy market and tradeable green certificate income streams when making investments wind farm energy income depends on the match of its uncertain time varying output with the regional half hourly market price a price that exhibits daily weekly and seasonal patterns and considerable uncertainty such price signals assist in driving investments that maximize project value to the electricity industry as a whole including integration costs and benefits for other participants recent nem rule changes will formally integrate wind generation in the market s scheduling processes while a centralized wind forecasting system has also been introduced this paper outlines experience to date with wind integration in the nem describes the evolution of market rules in response and assesses their possible implications for facilitating high future wind penetrations

the merit order effect of wind and photovoltaic electricity generation in germany 2008 2016 estimation and distributional implications abstract generation from renewable energy sources in germany has experienced a considerable uptake in recent years mainly responsible for this development is the german renewable energy sources act erneuerbare energien gesetz eeg this paper considers redistributive implications of the eeg for different electricity consumers using time series regression analysis we show that electricity generation by wind and pv has reduced spot market prices considerably by 6 mwh in 2010 rising to 10 mwh in 2012 we use these results to build a near term forecasting tool for merit order effects projected to reach 14 16 mwh in 2016 on the other hand the costs of the eeg are passed forward to consumers in the form of a surcharge our findings highlight significant redistributive transfers under the current design of the eeg in particular some energy intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme we also highlight implications of our results for other areas for reform of the eeg such as adequate remuneration mechanisms that ensure efficient operation and investment decisions are made under the scheme more generally these findings suggest that policy makers need to integrate distributional assessments into policy design and implementation