common trends and common cycles in regional crime this paper uses the vahid and engle journal of applied econometrics 8 341 360 1993 common trend common cycle approach to model the dynamics of regional crime rates in england over the period

shocking the eurozone abstract in this paper the monetary transmission mechanism within the european monetary union is investigated the impulse response functions and forecast error variance decompositions of a structural vector error correction model svecm are compared with those of a new keynesian theoretical model the identifying restrictions of the svecm are directly derived from the theoretical model two permanent shocks are identified one having only nominal and one having only real effects the three transitory shocks comprise a short term interest rate shock an aggregate demand shock and a money demand shock the main conclusions are that permanently reducing the inflation objective depresses output in the first year but has no real effects in the long run regarding output variability the results indicate that aggregate demand shocks are most important during the first year after which aggregate supply shocks dominate

limits to database protection fair use and scientific research exemptions a trend running diametrically opposed to the expansion of intellectual property rights ipr is the increasing awareness that dominant positions sustained by ipr may be mitigated through exemptions and statutory or compulsory licences it is argued that there are compelling economic reasons to protect valuable assets that are prone to copying but that there are equally compelling reasons to limit monopolistic claims and stimulate cross licensing practices compulsory licensing may serve as a stimulus to the bargaining process with private parties and research institutions alike another important category of information is public sector information access to information has become a concern and the european commission has followed up on its green paper on public sector information in the information society with a directive implementing its vision on affordable access for all and exploitation potential the right of access to information may be enforced through the european convention on human rights it not only guarantees the freedom of speech it also recognises the freedom to receive information

international evidence on the sources of macroeconomic fluctuations abstract this paper examines the causes of macroeconomic fluctuations in five economies germany japan sweden the united kingdom and the united states using a bivariate var model for output and inflation the results demonstrate that both demand and supply shocks are important sources of business cycle fluctuations moreover at the business cycle frequency there are strong similarities between germany the united kingdom and the united states where more than 50 percent of the forecast error variance in both output and inflation are due to supply shocks on the other hand in japan and sweden over 90 percent of the error variance in output and less than 20 percent of the error variance of inflation are due to supply shocks

the identification of monetary policy disturbances explaining the liquidity puzzle abstract this paper examines recent work on the identification of monetary policy disturbances its main finding is that the empirical anomalies found in the literature reflect a failure to properly address the federal reserve s policy of accommodating reserve demand shocks a new method of identifying monetary policy using nonborrowed reserves is proposed using this specification policy has a strong persistent liquidity effect regardless of subsample policy granger causes output even in the presence of interest rates explaining approximately 49 of the variance in output at a two year horizon and the residual explanatory power of interest rates for output is negligible

the economics of development a survey i the subject our definition of the subject will be the use of economic analysis to understand the economies of poor or developing countries this includes in particular how standards of living in the population are determined and how they change over time and further how policy can or should be used in the influence of these processes the definition contains in principle much or most of analytical methods in economics insofar as they can be put to use in the examination of the issues of interest this is as it should be but it poses a problem for a survey in a journal a comprehensive treatment is infeasible so we shall follow a different route the survey will focus on what i take to be the major themes and approaches which characterise the productive aspects of the subject there is therefore no pretence at being exhaustive the purpose is rather to highlight some of the advances many of these have been of real substance there are a number of possible purposes for a survey and it is important to be clear at the outset for whom it is intended what it is and what it is not this survey is addressed to economists and students of economics who know the tools of their trade but not necessarily how they have been applied to and fashioned for the analysis of the economics of developing countries it is a description of the ways in which problems can be productively formulated and approached in terms of examples chosen for their intrinsic importance and interest the vastness of the subject means that we have to be highly selective it does not seek to provide a summary evaluation of the current view of the appropriate response to immediate policy questions it is not a history of thought nor a research manifesto nor an attempt to adjudicate or settle the major debates where they arise naturally from the major purpose some judgements on these subjects will be offered but they do not themselves constitute the primary intent of this survey there are three lines of enquiry or sets of questions which have i suggest been distinctive of the most fruitful work in development economics they will

some economics of trade secret law despite the practical importance of trade secrets to the business community the law of trade secrets is a neglected orphan in economic analysis this paper sketches an approach to the economics of trade secret law that connects it more closely both to other areas of intellectual property and to broader issues in the positive economic theory of the common law

timber price dynamics following a natural catastrophe catastrophic shocks to existing stocks of a renewable resource can cause long run price shifts with timber these long run price shifts may be accompanied by a short run price drop due to salvage hurricane hugo damaged 20 of southern pine timber in the south carolina coastal plain in 1989 to estimate the short and long run effects of the hurricane on the prices of timber stocks we estimated an intervention model of the residuals of cointegration of south carolina sawtimber and pulpwood stumpage prices with prices of similar products from other regions modeling revealed a 30 negative price spike due to salvage and a long run enhancement effect leading to prices that are 10 to 30 higher than they would have been had hugo not occurred

a money demand system for euro area m3 in order to assess the importance of monetary and financial developments for key macroeconomic variables in the euro area a money demand system for m3 is estimated adopting a structural cointegrating var approach while maintaining a good statistical representation of the data long run relationships are based on economic theory by using generalized response profiles the dynamics of the money demand system is investigated without any further identifying assumptions error bounds of the profiles are derived using bootstrap simulations

coffee economic fluctuations and stabilisation an intertemporal disequilibrium model with capital market imperfections abstract this paper develops a two period disequilibrium model of a small open economy under keynesian unemployment to analyse the effects of temporary anticipated and permanent coffee price shocks the model includes a government sector that administers a commodity price stabilisation fund and allows for capital market imperfections the type of capital market imperfection makes an important difference to the results of the model in particular when the government borrows on more favourable terms than individuals the coffee price stabilisation fund reduces the multiplier effects of temporary and permanent shocks not only in the first but also in the second period by contrast when individuals face an upward sloping supply of capital curve the stabilisation fund shifts some of these effects from the first to the second period

coffee export booms and monetary disequilibrium some evidence for colombia the theoretical models that analyse the monetary consequences of export booms show that under a regime of fixed exchange rates they affect not only the demand for money via real income but also the money supply via foreign exchange accumulation within this theoretical framework this study proposes an empirical approach to determine whether the coffee booms of the second half of the 1970s and mid 1980s led to excess money supply in the colombian economy the findings provide evidence in favour of a direct association between coffee export booms and excess money supply implying that external disturbances jeopardize the ability of the economic authorities to carry out successful monetary policy

exchange rates and prices the adjustment of relative prices to exchange rate movements is explained in an industrial organization approach given labor costs in the respective currencies exchange rate movements change costs for firms selling in the home market and thus disturb the industry equilibrium the extent of absolute and relative price adjustment is shown to depend on market integration product substitutability the relative number of domestic and foreign firms and the market structure the impact of exchange rates on prices is illustrated in a variety of approaches including the cournot a dixit and j stiglitz 1977 and s salop 1979 models some empirical evidence is offered in support of the theory copyright 1987 by american economic association

the fuelwood market in greece an empirical approach abstract wood has been since ancient times the basic household heating medium nowadays wood remains the primary energy source in rural areas of developing countries mainly in africa in greece the domestic demand of fuelwood is relied mainly on the fuelwood domestic supply especially during the post war period the domestic supply satisfies adequately the domestic demand eliminating the role of imports the present study surveys the long run relationship between the fuelwood prices of different forest species in order to determine the role of the special market conditions in their price formation in addition the error correction model is estimated in order to survey the direction of the granger causality among the prices of the fuelwood forest species the implementation of the impulse response analysis and the variance decomposition confirmed that coniferous and beech fuelwood producer price may account for the volatility of the oak fuelwood producer price this result may contribute greatly to the conservation of oak forest an important carbon storage forest ecosystem

stock market returns in an emerging financial market turkish case study increased globalization in financial markets implies that the percentage of all shares under foreign ownership in domestic stock markets has been rising the recent speculative attacks on the foreign exchange market in november 2000 followed by february 2001 led turkey into a deep economic crisis real stock returns as an important indicator for a forthcoming or pending financial crisis using net capital flows have already been established in gazioglu 2003 in this article we explore the effects of capital inflows and outflows to real exchange rates and the real stock market returns before and after the financial crisis we investigate the relationship between real exchange rate real stock returns and capital flows we decompose the foreign flows into real assets and liabilities in order to investigate the possible long term effect of inflows and outflows empirical investigation shows that the long term relationship only appears between the real exchange rates and the real bank liabilities owned

a theory of trade secrets in firms this article provides a simple theoretical model of trade secrets in hierarchical firms a crucial assumption is that each manager has access to trade secrets pertaining to his own hierarchical level as well as to all lower levels the article explores some implications of this assumption for optimal degree of trade secrets accumulation and protection as well as for the wage structure in firms in addition the model implies that managers may have an incentive to overpay their subordinates and protect their firms trade secrets too much

oil price fluctuations and singapore economy this study finds that the impact of an oil price shock on the singapore economy is marginal both impulse response and variance decomposition analysis provide reasonable grounds to believe that the impact only had an insignificant adverse effect on singapore s gross domestic product gdp inflation and unemployment rates further analysis on two oil vulnerability measures supports the finding the declining trend of oil intensity in singapore since 1989 and the declining shares of the singapore s expenditure on oil consumption as a percentage of its nominal gdp this study identifies however that the impact of an oil price shock on the singapore economy should not be considered negligible even though it is small

fiscal policy in good and bad times in this paper we analyze whether the effect of fiscal policy differs across the business cycle to tackle this question we use a regime switching error correction framework where nonlinearities are only modeled in the short run and have no impact on the long run equilibrium regime specific shocks to government revenue and government purchases are identified using sign restrictions linear combinations of the impulse responses of these basic shocks are used to construct a deficit spending shock and a deficit financed tax cut shock we find that active spending policies have a stronger impact in recession with multipliers exceeding unity and should be preferred to deficit financed tax cuts

the relative effectiveness of patents and secrecy for appropriation abstract changes in patent law global competition and the rise of several new technologies suggest that patents could be of greater value than secrecy for many innovative firms particularly small firms that are unable to use market power or other factors to appropriate their investments in innovation data from the 1993 european community innovation survey cis for up to 2849 r d performing firms is analysed to determine the relative importance of secrecy vs patents this particular combination of appropriation methods is interesting because secrecy can act as a mutually exclusive alternative to patents the results show that a higher percentage of firms in all size classes rate secrecy as more valuable than patents however ordered logit regressions show that the probability that a firm rates secrecy as more valuable than patents declines with an increase in firm size for product innovations while there is no relationship for process innovations the firm s r d intensity has no effect on the relative value of secrecy vs patents there is weak evidence to show that participation in cooperative r d increases the value of patents over secrecy for product innovations the results are relevant to ongoing debates over changes to the patent system and the need for policies to encourage small firms to patent more

japan s financial deregulation and linkage of the gensaki and euroyen deposit markets summary this paper examines whether japan s financial deregulation weakened the linkage between the euroyen and gensaki markets it defines and analyses the linkage of the two markets in terms of the persistence and predictability of yield spreads as well as cross market causality by using johansen tests and an error correction model this paper shows first cross market causality before and after deregulation and second one common trend in interest rates substantial gensaki euroyen yield spreads and a slower response of the one month gensaki euroyen yield spread to a shock after deregulation

the search for a stable money demand function a survey of the post 1973 literature phe question of whether the demnand function for money is stable is one of the most important recurring issues in the theory and application of macroeconomic policy what is being sought in a stable demand function is a set of necessary conditions for money to exert a predictable influence on the economy so that the central bank s control of the money supply can be a useful instrument of economic policy as such the notion of a stable demand function appears to involve three key elements e g john t boorman 1976 p 317 and david e w laidler 1977 pp 34 35 first the demand for money relation should be highly predictable in a statistical sense as measured by the usual goodness of fit statistics precision of estimated coefficients and presumably its ability to forecast accurately out of sample second a stable demand function for money has relatively few arguments a relationship that requires knowledge about a large number of variables in order to pin it down is in effect not predictable finally the variables that appear as arguments in the function should represent significant links to spending and economic activity in the real sector in sum a stable demand function for money means that the quantity of money is predictably related to a small set of key variables linking money to the real sector of the economy the importance of a stable money demand function for monetary policy can be illustrated with the standard is lm model in which interest rates and gnp are the endogenous variables in this context a stable demand function for money translates into a well defined relationship between money interest rates and gnp

patents and other intellectual property rights in this article the author reviews intellectual property rights iprs with some emphasis on the protection of agricultural and life sciences innovations the main institutional features of iprs are first discussed along with a brief historical background and an articulation of the main rationale for the existence of such rights this is followed by an overview of the principal economic issues related to iprs the author explains the main benefit cost trade offs of allowing patents and other iprs and then analyzes specific issues in some depth including the scope of patent protection the effects of patent races and the problems arising when iprs concern cumulative and or complementary innovations the author further illustrates the economics of iprs by considering instruments alternative to patents such as prizes and government procurement contracts finally the author briefly discusses some open policy issues in this area

us and canadian livestock prices market integration and trade dependence cointegration of canadian and us livestock prices points to the existence of market integration in the period january 1996 to december 2004 trade flows of livestock and beef products were nonexistent between canada and the united states for many months in 2003 and 2004 suggesting market segmentation this lack of trade in beef and livestock was due to livestock beef import bans by both countries due to bovine spongiform encephalopathy it was also determined that canada s trade dependence in livestock and beef is cointegrated with canadian and us livestock prices however as the trade dependence variable is shocked the effects on canadian and us prices are opposite although one would expect that in an integrated market the price responses to an exogenous shock would be similar or statistically identical this result reinforces the case against the use of price cointegration analysis in determining presence or absence of market integration empirical results in this article raise some very difficult q

linkages among interest rates in the united states germany and norway the johansen multivariate cointegration methodology is used to analyze relationships among short term and long term interest rates in the united states germany and norway a variance decomposition approach is applied to estimate the proportion of each interest rate s forecast error variance attributable to innovations in the other interest rates impulse response functions are plotted to illustrate the speed with which interest rate events are transmitted between capital markets the analyses illustrate that us interest rates have a significant influence on both german and norwegian interest rates while the reverse effect is modest norway is also strongly exposed to german interest rate movements which reflects the consequences of a small country linking its currency to the value of european currencies

capital market integration in the pacific basin region an impulse response analysis abstract we examine the extent of capital market integration in a group of pacific basin countries following the deregulation of their markets and explore whether the financial influence of japan in the region has overtaken that of the us looking at long run comovements of real interest rates through the use of cointegration and using impulse response analysis to examine the speed of adjustment of real interest rates to long run equilibrium following a shock in one of the markets which is another indicator of the degree of capital market integration we find that these countries are closely linked with world financial markets and more so with japan than with us

the firm strikes back non compete agreements and the mobility of technical professionals this study explores how firms shape labor markets and career paths using employee non compete agreements the sociology of work has overlooked non competes but data indicate that nearly half of technical professionals in the united states are asked to sign such employment contracts fearing loss of investments in talent and trade secrets firms use non competes to strike back against technical professionals increased mobility following the decline of internal labor markets in depth interviews with 52 randomly sampled patent holders in a single industry coupled with a survey of 1 029 engineers across a variety of industries reveal that ex employees subject to non competes are more likely to take career detours that is they involuntarily leave their technical field to avoid a potential lawsuit moreover firms strategically manage the process of getting workers to sign such contracts waiting for workers bargaining position to weaken these findings inform our understanding of the social organizati

dissecting the ppp puzzle the unconventional roles of nominal exchange rate and price adjustments the conventional view as expounded by sticky price models is that price adjustment determines the ppp reversion rate this study examines the mechanism by which ppp deviations are corrected nominal exchange rate adjustment not price adjustment is shown to be the key engine governing the speed of ppp convergence moreover nominal exchange rates are found to converge much more slowly than prices with the reversion being driven primarily by nominal exchange rates real exchange rates also revert at a slower rate than prices as identified by the ppp puzzle j econ lit 34 1996 647 c 2003 elsevier b v all rights reserved

economic analysis of the profitability of existing wind parks in portugal abstract discussions on the appropriate policy design and level of incentive to promote renewable energy adoption and meet the 20 20 20 goals have spurred recently in the european union these discussions are also ongoing in portugal namely in what concerns the level and duration of feed in tariffs that should be provided to independent power producers this in turn raises the question of whether the past feed in tariff levels were well designed to achieve the goals of a larger penetration of renewables in the portuguese grid the policies to induce wind adoption have led to a growth in wind installed capacity and share of electricity generated by wind in portugal but questions arise on their cost effectiveness and whether alternative policy designs would have led to the same goal in this work we estimate profits made by wind independent power producers for wind parks that were connected in portugal between 1992 and 2010 and conclude that the feed in tariffs have overcompensated some wind power producers we also discuss the recent changes in feed in tariff legislation published in february 2013 and estimate the expected costs of the introduced changes

origins and consequences of changes in u s corporate taxation 1981 1998 foreign direct investment hat u s corporate tax policy is partly determined by partisan and organizational forces as well as by domestic economic forces is a standard theoretical view scholars find that democratic presidential administrations have differed from republican administrations in that the former tended to increase the tax burdens of corporate taxpayers other studies report that increasing business political activity has had an ameliorating effect on business tax burdens on the economic side corporate tax policy is counter cyclical investment inducing and linked with growth and investment in long run structural relationships in at least two important ways however the structure of the american economy differed in the 1980s and 1990s from earlier periods first the u s economy internationalized with the oil shocks of the 1970 s serving as globalization s annunciation second economic agents became increasingly sophisticated in anticipating how governments would respond to economic events and how these government policies would in turn affect economic events the rational expectations revolution led president reagan among others to conclude that traditional u s macroeconomic policies were ineffective some scholars argue that these structural shifts changed the dynamics of u s corporate tax policy they theorize that in open economies like the

the multi market analysis of a housing price transmission model in this article we examine dynamic relationships among housing prices from four firsttier cities in china from december 2000 to may 2010 and present an equilibrium model of housing price in multi markets by explicitly incorporating and modelling endogenous price series in competing housing markets our empirical model is able to capture the existence of long run equilibrium relationships and important short run dynamics and price structures such as price leadership price transmission lag and asymmetric price responses such multi market analysis has generalized implications and can easily be applied to analyse the pricing dynamics among other real estate markets in the world our major contribution lies in two aspects first we employ an error correction model ecm with directed acyclic graphs dag to study the price dynamics in the four largest and key housing markets in china second we uncover a price transmission among these housing markets in china and provide an insightful understanding of price adjustment across markets the revealed effective price transmission and high correlation among these different markets actually is not a good thing for a stable financial system and for the defence against price bubbles in the housing market

the role of macroeconomic instability in public and private capital accumulation and growth the case of turkey 1963 1999 this study investigates the empirical relationship s between macroeconomic instability public and private capital accumulation and growth in turkey over the period 1963 1999 time series econometric techniques such as cointegration and impulse response analysis are used the results of this paper suggest that the chronic and increasing macroeconomic instability of the turkish economy has seriously affected her capital formation and growth furthermore the turkish experience indicates that chronic macroeconomic instability seems to be a serious impediment to public investment especially to its infrastructural component and shatters or even reverses the complementarity between public and private investment in the long run

economic adjustment and exchange rates in developing countries in spite of the attention paid exchange rates in recent economic debates on developing countries relatively few studies have systematically analyzed in detail the various ramifications of exchange rate policy in these countries in this new volume from the national bureau of economic research leading economists use rigorous models to tackle various exchange rate issues while also illuminating policy implications that emerge from their analyses the volume divided into four main sections addresses the role of exchange rates in stabilization programs and the adjustment process the importance of exchange rate policy during liberalization reform in developing countries exchange rate problems relevant and unique to developing countries illustrated by case studies and the problems defining measuring and identifying determinants of real exchange rates authors of individual papers examine the relation between commercial policies and exchange rates the role of exchange rate policy in stabilization programs the effectiveness of devaluations as a policy tool and the interaction between exchange rate terms of trade an capital flow this research will not only prove crucial to our understanding of the role of exchange rates in developing countries but will clearly set the standard for future work in the field

impulse response analysis of cointegrated systems abstract impulse response or dynamic multiplier analysis of vector autoregressive systems with cointegrated variables is considered the asymptotic distribution of the responses estimated with johansen s 1988 maximum likelihood procedure is derived the results are illustrated with an analysis of a west german money demand system the investigation shows that a direct interpretation of the cointegration relations may be difficult or misleading thereby the virtue of impulse response analysis for applied work is illustrated

distributional costs of wind energy production in portugal under the liberalized iberian market regime abstract wind generation in portugal and spain has grown due to a decrease in technology cost and the availability of renewables electricity generation incentives there is a strong interconnection between spain s and portugal s transmission systems resulting in common prices in both countries however portuguese and spanish producers receive the incentives for producing wind based electricity that are specified in their own national policies resulting in different costs to rate payers in this paper we estimate the costs to portuguese rate payers associated with the current market design and policy incentives to do so we regress hourly spot electricity market prices as a function of hourly wind generation and estimate the resulting feed in tariff costs distributional effects over the various rate payer categories total costs for rate payer are at the minimum level if joint wind generation in portugal and spain increases by 5 5 from what it is today if wind generation increases much further then the costs increase due to the fit overcost increase if wind generation decreases from current levels then costs also increase due to the merit order effect furthermore we find that rate payer categories will endure different portions of the costs with an increase in wind generation penalizing predominantly 20 7 kva rate payers

domestic and foreign price links in an aggregate supply framework the case of greece abstract using price and wage equations an aggregate supply relationship is derived which relates domestic to foreign prices and output it is shown that among all parameters only the degree of wage indexation matters to the question of whether the nominal exchange rate can affect competitiveness cointegration results support the existence of a long run relationship among the variables of the model which is in conformity with the relationship derived in the theoretical part of the paper empirical analysis a does not confirm relative purchase power parity for greek wholesale price indices and b does not contradict the hypothesis that greek producer prices are homogeneous of degree one in foreign prices

what drives natural gas prices a structural var approach abstract in this study we develop a structural vector autoregressive model var for the german natural gas market our setup allows us to analyze the determinants of the natural gas price in a comprehensive framework in particular we illustrate the usefulness of our approach by disentangling the effects of different fundamental influences on gas prices during three recent supply interruptions the russian ukrainian gas dispute of january 2009 the libyan civil war in 2011 and the withheld russian exports in february 2012 our results show that the natural gas price is affected by temperature storage and supply shortfalls in the short term while the long term development is closely tied to both crude oil and coal prices capturing the economic climate and the substitution relationship between the different energy commodities

financial development and the instability of open economies this paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies our basic model is a dynamic open economy model with a tradeable good produced with capital and a country specific factor we also assume that firms face credit constraints with the constraint being tighter at a lower level of financial development a basic implication of this model is that economies at an intermediate level of financial development are more unstable than either very developed or very underdeveloped economies this is true both in the sense that temporary shocks have large and persistent effects and also in the sense that these economies can exhibit cycles thus countries that are going through a phase of financial development may become more unstable in the short run similarly full capital account liberalization may destabilize the economy in economies at an intermediate level of financial development phases of growth with capital inflows are followed by collapse with capital outflows on the other hand foreign direct investment does not destabilize

currency devaluation aggregate output and the long run an empirical study abstract this paper estimates the effect of currency devaluation on the aggregate output level in six asian countries using a unique methodology developed by wickens et al 1988 economic journal 189 205 the estimated results suggest that devaluation in general is neutral in the long run in some cases it even can have a contractionary effect

a medium term framework for analyzing the real exchange rate with applications to the philippines and tanzania a competitive official real exchange rate is important to external balance and sustainable medium term growth in developing countries this article presents a methodology for estimating appropriate real rate and provides a basis for evaluating the extent to which the prevailing rate is misaligned in particular the medium term equilibrium real exchange rate is evaluated by estimating the effects of structural factors on the trend observed for a country s real rate compared with the rates of its major trading partners taking into account the effects of macroeconomic policy structural factors include terms of trade external capital flows and trade policy plus other factors relevant to the circumstance of individual countries the implied change in the medium term equilibrium real rate is compared with that of a historical reference period the application of this methodology to two developing countries the philippines and tanzania illustrates how it can complement and improve upon other analytic approaches such as those using purchasing power parity and analysis of parallel rates this approach is complemented by an analysis of the relation between a country s real exchange rate and those of its major competitors

the common trend and transitory dynamics in real exchange rate fluctuations this study examines the behaviour of both common trend ct and transitory components of real exchange rate rer fluctuations under the current float the ct component is in most cases found to be sizeable albeit its relative importance can vary considerably across major currencies and its estimate can be sensitive to whether or not long run purchasing power parity ppp is imposed on the data further analysis suggests that both ct and transitory innovations are linked much more to interest rate changes than to productivity changes accordingly it is interest rate not productivity disturbances that drive the highly persistent rer

an empirical analysis of the fiscal incidence of renewable energy support in the european union abstract in liberalised energy markets electricity from renewable energy re using solar pv and wind turbines requires financial support because the expected number of generation hours is insufficient to induce private investment such support has a direct cost from the additional expenditure over what would have been incurred had fossil fuel generation been used and indirect costs arising from the random and distributed nature of the re output comparing european union countries between 2007 and 2017 we find the pricing structure of retail electricity is regressive and correlated to reliance upon re although initially the direct and indirect costs of re affects integrated utilities and aggregators the ultimate burden largely falls upon lower income cohorts given policy objectives for re these finding are worrisome though as a society we may benefit from reducing dependence upon fossil fuels the burden of this transition falls upon those with the lowest income raising questions over fairness explaining the reasons for fiscal regressiveness leads to suggestions on how it may be redressed

lessons from wind policy in portugal abstract wind capacity and generation grew rapidly in several european countries such as portugal wind power adoption in portugal began in the early 2000s incentivized by a continuous feed in tariff policy mechanism coupled with public tenders for connection licenses in 2001 2002 and 2005 these policies led to an enormous success in terms of having a large share of renewables providing electricity services wind alone accounts today for 23 5 of electricity demand in portugal we explain the reasons wind power became a key part of portugal s strategy to comply with european commission climate and energy goals and provide a detailed review of the wind feed in tariff mechanism we describe the actors involved in wind power production growth we estimate the environmental and energy dependency gains achieved through wind power generation and highlight the correlation between wind electricity generation and electricity exports finally we compare the portuguese wind policies with others countries policy designs and discuss the relevance of a feed in tariff reform for subsequent wind power additions

financial instability in latin america in this paper i deal with a number of issues related to financial instability in latin america i first discuss from a macroeconomic research perspective what i believe are some of the most important policy issues faced by the latin american nations these include the effectiveness of controls on capital inflows the effect of exchange rate depreciation on output and the international transmission of the business cycle second i argue that the economic research agenda on latin america should not ignore history in latin america more so than in any other region in the world there has been a self destructing tendency for repeating history 2003 elsevier ltd all rights reserved

assessing the impact of us ethanol on fossil fuel markets a structural var approach abstract despite the growing importance of biofuels the effect of biofuels on fossil fuel markets is not fully understood we develop a joint structural vector auto regression var model of the global crude oil us gasoline and us ethanol markets to examine whether the us ethanol market has had any impact on global oil markets the structural var approach provides a unique method for decomposing price and quantity data into demand and supply shocks allowing us to estimate the distinct dynamic effects of ethanol demand and supply shocks on the real prices of crude oil and us gasoline ethanol demand in the us is driven mainly by government support in the form of tax credits and blending mandates shocks to ethanol demand therefore reflect changes in policy more than any other factor in contrast ethanol supply shocks are driven by changes in feedstock prices a principle finding is that a policy driven ethanol demand expansion causes a statistically significant decline in real crude oil prices while an ethanol supply expansion does not have a statistically significant impact on real oil prices this suggests that even though us ethanol market is small the influence of us biofuels policy on the crude oil market is pervasive we also show that ethanol demand shocks are more important than ethanol supply shocks in explaining the fluctuation of real prices of crude oil and us gasoline

a systematic framework for analyzing the dynamic effects of permanent and transitory shocks this paper proposes a systematic framework for analyzing the dynamic e ects of permanent and transitory shocks on a system of n economic variables we consider a two step orthogonolization on the residuals of a vecm with r cointegrating vectors the rst step separates the permanent from the transitory shocks and the second step isolates n r mutually uncorrelated permanent shocks and r transitory shocks the decomposition is computationally straightforward and entails only a minor modi cation to the choleski decomposition commonly used in the literature we then show how impulse response functions can be constructed to trace out the propagating mechanism of shocks distinguished by their degree of persistence in an empirical example the dynamic responses to the identi ed permanent shocks have properties similar to shocks to productivity the real interest rate and money growth even though no economic

persistence in foreign exchange rates abstract this study examines the long run behavior of seven daily nominal exchange rates using univariate and multivariate persistence measures our results indicate that for some currencies the long run behavior deviates from that of a pure random walk in certain periods the multivariate estimates reflect the effect of both the ems exchange rate mechanism and increased post louvre accord coordinated intervention a large portion of the effect of a shock in one currency on another currency s long run value can be attributed to contemporaneous effects on the other currencies

measuring exchange rate misalignment inflation differentials and domestic relative prices abstract empirical studies of exchange rate misalignment generally use crosscountry differences in overall inflation as proxy measures for a country s real exchange rate rer this paper shows that using such differential inflation proxies introduces two systematic biases in model results understatement of rer movements and a spurious trend towards depreciation these biases can be corrected only with disaggregated data on domestic relative prices of tradable and nontradable products using a standard model with disaggregated data for zimbabwe it is found that proxy based results understate misalignment by almost 25 and exaggerate depreciation by 4 per year

wind balancing costs in a power system with high wind penetration evidence from portugal abstract the growth of intermittent renewable power generation has been drawing attention to the design of balancing markets portugal is an interesting case study because wind generation already accounts for a high fraction of demand 23 in 2012 2016 but still there are no economic incentives for efficient wind forecasting wind balancing costs are passed to end consumers we analyze the evolution of the balancing market from 2012 to 2016 using actual market data we find wind balancing costs around 2 euros per mwh of generated energy one main reason for these low costs is the existence of a robust transmission grid which allows for the compensation of positive with negative wind imbalances across the system nevertheless the results suggest that final consumers could save several million euros per year if wind generators were made responsible for the economic cost of their imbalances in line with other european markets

exchange rate regimes and export performance of developing countries a fter the breakdown of the bretton woods system in 1973 many developing countries moved away from single currency pegging to more flexible exchange rate regimes an extensive literature on the appropriateness of various exchange rate regimes for developing countries economic performance has developed one issue concerns how developing countries choice of exchange rate regime affects their export performance comparative analyses of the impact of various exchange rate regimes on developing countries exports have however been overlooked different exchange rate regimes give rise to different tendencies for exchange rate misalignments and exchange rate volatility there are two reasons why the exports of developing countries may be subject to more severe consequences of exchange rate misalignments and exchange rate volatility than the exports of developed countries first exporters in developing countries may be expected to be more vulnerable to exchange rate misalignments since developing countries exports are often made up of raw material and agricultural products in which exporters usually have little market power it follows that exporters will have to respond to exchange rate misalignments by changing the export quantity rather than the export price second since developing countries usually have underdeveloped financial markets exchange rate volatility may be more harmful

stochastic trends and economic fluctuations in a small open economy in this paper we describe how restricted vector autoregressions can be employed to examine the sources of macroeconomic fluctuations we show how cointegration restrictions can be used to identify a var system with common stochastic trends subject to transitory and permanent changes in average growth and how we may investigate the system s responses to permanent shocks i e to innovations to the trends theoretical cointegration vectors are derived from a small open economy growth model for terms of trade real gdp real consumption and real investments applying these methods to swedish annual data 1875 1986 we find that permanent real supply shocks account for most of the fluctuations in gdp even in the short run

the impact of food scares on price adjustment in the uk beef market abstract this paper considers the impact of food scares predominately concerns relating to bse on uk beef prices at retail wholesale and producer levels over the 1990s acknowledging the co movement that exists between prices in the meat marketing chain we use a co integrating framework the results of which show the importance of publicity regarding the safety of food in the transmission of beef prices in the uk the food publicity index that we use has a marked negative impact on the prices at all levels a result that is consistent with the effect of an inward shift in the demand function moreover the extent of price decline varies between the marketing stages entailing that the price spreads rise in response to an increase in the negative publicity about food safety while not a formal test of market power these observations are consistent with recent theoretical results demonstrating that market power exacerbates price changes in the upstream sectors for a given change in the retail demand function the implication of these varying price changes is that the food safety concerns also cause the marketing margins between the stages to widen the uk s competition commission has recently investigated the abuse of market power in the food sector inspired largely by this specific issue

dynamic linkages among real interest rates in international capital markets abstract short run and long run dynamic linkages among weekly real interest rates for g 10 countries are examined using a variety of time series tests these tests give special attention to the time series properties of nominal interest rates ex ante expected rates of inflation and real interest rates term structure information is used to recover a theoretically consistent measure of ex ante expected inflation in sample and out of sample granger causality tests are also examined to evaluate lead lag relationships among real interest rates the results provide strong support for well integrated markets particularly in the long run the results imply leadership roles for the us in international asset markets