can oil prices forecast exchange rates an empirical analysis of the relationship between commodity prices and exchange rates we show the existence of a very short term relationship at the daily frequency between changes in the price of a country s major commodity export and changes in its nominal exchange rate the relationship appears to be robust and to hold when we use contemporaneous realized commodity price changes in our regression however when we use lagged commodity price changes the predictive ability is ephemeral mostly appearing after instabilities have been appropriately taken into account

co firing coal with wood pellets for u s electricity generation a real options analysis abstract in contrast to eu u s electric utilities are not employing the bioenergy technology of co firing wood pellets with coal this difference in employment patterns is explored within a real options analysis roa for possible u s utilization of wood pellets considering fuel price series from 2009 to 2014 for analysis these series are divided into two sub periods based on different market conditions infancy 2009 2011 and substitution 2012 2014 roa indicates co firing wood pellets with coal is feasible considering adoption during wood pellets infancy under low discount rates and long power plant lifespans a portfolio effect of employing multiple fuels underlies this result however co firing is not currently economically feasible the different adoption decisions are likely a consequence of recent cheap and abundant u s natural gas for co fired wood pellets to be feasible government incentives and or a market increase in natural gas prices appear necessary

reassessing the empirical relationship between the oil price and the dollar abstract this paper aims at reassessing the empirical relationship between the real price of oil and the u s dollar real effective exchange rate over the 1974 2015 period we find that changes in both variables are now linked by a negative relationship going from the dollar exchange rate to the real oil price however the same relationship is found positive when ending the sample in the mid 2000s in line with the previous literature to understand and investigate this evolution we rely on a nonlinear smooth transition regression model in which the oil price dollar nexus depends on the dynamics followed by the u s currency our results show that the relationship is negative most of the times but turns positive when the dollar hits very high values as in the early eighties

the feeble link between exchange rates and fundamentals can we blame the discount factor recent research demonstrates that the well documented feeble link between exchange rates and economic fundamentals can be reconciled with conventional exchange rate theories under the assumption that the discount factor is near unity engel and west 2005 we provide empirical evidence that this assumption is valid lending further support to the above explanation of the empirical disconnect between nominal exchange rates and fundamentals

public policy supports and export performance of bioenergy technologies a dynamic panel approach abstract this study investigates the effects of public policy supports on the export performance of bioenergy technologies it uses panel data from 18 countries from the 1992 to 2008 period panel unit root and cointegration tests are applied taking into account the results of structural break tests for each time series and testing for the presence in the panel of cross sectional dependence time series data on public supports and exports are integrated and cointegrated the results of dynamic ordinary least squares indicate that in the long term public r d expenditures have a positive effect on the exports the contribution of bioenergy to the total energy supply has a negative effect on the exports and gdp has a positive effect on the exports the contribution of bioenergy to total energy supply responds to deviations in the previous period from the long term equilibrium additionally blundell bond system generalized methods of moments estimations are made to determine dynamic causality in a panel vector error correction mechanism setting evidence of a positive strong and short term relationship from exports to r d expenditures and of a positive short term causality from exports to the contribution of bioenergy to total energy supply is found a positive strong bidirectional relationship between gdp and exports is also uncovered there is a positive strong bidirectional and short term relationship between gdp and the contribution of bioenergy to total energy supply finally some policy implications based on the results of this study are offered

factors affecting drivers willingness to pay for biofuels the case of italy biofuels represent a promising alternative to substitute fossil fuels and given the relevance of environmental impacts of the transport sector policy initiatives worldwide aim at supporting the shift towards such cleaner energy source acknowledging the crucial role that biofuels will play in years to come in the energetic paradigm the study aims at investigating key determinants of drivers willingness to pay for biofuels focusing on a sample of 260 individuals from northern italy n 260 in line with recent research on consumer behavior socio demographics are not good predictors of drivers willingness to pay surprisingly on the other hand knowledge of the topic is negatively correlated to willingness to pay so that the more people know about biofuels the less they are willing to pay a premium price moreover certification is not an effective tool to convince drivers of the eco friendliness of biofuels hence spurring willingness to pay possible explanations of the research findings as well as policy implications are discussed in detail along with suggestions for future research on the topic

commodity currencies and causality some high frequency evidence abstract i investigate the link between economic fundamentals and exchange rate adjustment to commodity price fluctuations i overcome the traditional issue of simultaneity by exploiting the september 14 2019 drone attack on two saudi arabian refineries as a natural experiment this unanticipated event caused the largest 1 day global crude oil price shock in over a decade using high frequency exchange rate data for 30 countries i link the cross section of exchange rate movements around the event to country specific fundamentals and currency risk factors crude export and import intensities were associated with appreciation depreciation additionally countries with higher policy interest rates and weaker financial positions experienced greater currency depreciation while safe haven currencies appreciated consistent with risk off sentiment triggering carry trades to unwind estimated pre event crude oil and vix betas can also explain the cross section of exchange rate adjustment and these currency risk factors are tightly associated with oil related and financial fundamentals respectively

forecasting the real price of oil time variation and forecast combination abstract this paper sheds light on the questions whether it is possible to generate an accurate forecast of the real price of oil and how it can be improved using forecast combinations for this reason the following paper will investigate the out of sample performance of seven individual forecasting models the results show that it is possible to construct better forecasts compared to a no change benchmark for horizons up to 24 months with gains in the mspe ratio as high as 25 in addition some of the existing models will be extended e g the u s inventories model by introducing more suitable real time measures for the brent crude oil price and the var model of the global oil market by using different measures for the economic activity furthermore the time performance investigated by constructing recursively estimated mspe ratios discovers potential weaknesses of the used models hence several different combination approaches are tested with the goal of demonstrating that a combination of individual models is beneficial for the forecasting performance thereby a combination consisting of four models has proven to have a lower mspe ratio than the best individual models over the medium run and in addition to be remarkably stable over time

determinants of technical efficiency in the bioenergy industry in the eu28 region most previous bioenergy industry research has concentrated on how to implement a certain level of yield however few articles have paid attention to rational resource allocation to increase efficiency to enhance bioenergy production through proper use of available resources this study identified the effects of internal country specific and external macroeconomic determinants of technical efficiency level in the bioenergy industry for the eu28 region the study was established based on a conceptual framework suggesting a correlation between input use and level of technical efficiency a panel data analysis method was employed for the analysis and a panel regression analysis framework based on the fixed effect fe model and random effect re model was used to examine the potential determinants of technical efficiency level in the bioenergy industry for the eu28 region for the period between 1990 and 2013 the results indicate that the technical efficiency level of the bioenergy industry in developing countries is higher than in developed countries the empirical findings also suggest that technical efficiency has greater influence on pure technical efficiency levels capital input labor input gross domestic product inflation and interest rate significantly affected the technical efficiency of the bioenergy industry in the developing and developed countries in the eu28 region during the period of this study the findings clearly call for regulators and decision makers to review the technical efficiency level of the bioenergy industry within the eu28 region this study also provides better information and guidance to the boards of the bioenergy industry as they need to have a clear understanding of the influence technical efficiency has on bioenergy production performance moreover the results of this study have implications for investors who focus mainly on profits from their investments

interdependent international relations and the expansion of ethanol production and consumption the brazilian perspective abstract the global production and consumption of ethanol are expected to increase the growing interdependence of markets and nations producers and consumers of biofuels has led actors to seek and devise mechanisms intended to develop the sector this paper aims to analyze the interdependent international relations between brazil and other ethanol biofuel producer and consumer countries to do so the paper explores the theory of complex interdependence and the game theory a quali quantitative study was conducted involving the application of two questionnaires to experts on biofuels and documentary analysis aided by qda miner software the results show that brazil shares highly interdependent relations with the united states an intermediate degree of interdependence with europe and a low degree of interdependence with china the dimensions of those interdependent relations can be ranked according to importance in the following order first the political then the economic technical and finally the social environmental dimensions a number of actions can be envisaged that could lead ethanol to achieve an increasingly strategic position in the diversification of the energy matrix in different countries technological efforts to improve production efficiency the creation of globally integrated policies designed to provide security and develop the production and consumption infrastructure the reduction of international tariffs on the product and the transformation of ethanol into a global commodity with a large number of countries buying and selling the product this paper faced the challenge of integrating approaches and concepts from two complex theoretical areas complex interdependence theory and game theory the research methodology and the insights gained from the ethanol case contribute to the literature on the applicability of these two theoretical approaches

auctioning incentive contracts this paper draws a remarkably simple bridge between auction theory and incentive theory it considers the auctioning of an indivisible project among several fi rms the firms have private information about their future cost at th e bidding stage and the selected firm ex post invests in cost reduct ion the authors show that 1 the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid 2 the winner faces a linear incenti ve contract 3 the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost and 4 the share of cost overruns borne by the winn er decreases with the winner s announced expected cost copyright 1987 by university of chicago press

the effects of surprise and anticipated technology changes on international relative prices and trade abstract this paper argues that it is important to distinguish surprise and anticipated components of total factor productivity tfp when we study the international transmission of tfp shocks we document that surprise and anticipated shocks to us tfp induce distinct dynamics for international relative prices the real exchange rate and the terms of trade and international trade real exports real imports and the trade balance our empirical findings can reconcile some conflicting empirical results in the literature and hence lead to a better understanding of the international transmission of tfp shocks in addition we evaluate a standard international macroeconomic model and discuss the mechanisms that may help to replicate our empirical findings

forward and spot exchange rates in a multi currency world separate literatures study violations of uncovered interest parity uip using regression based and portfolio based methods we propose a decomposition of these violations into a cross currency a between time and currency and a cross time component that allows us to analytically relate regression based and portfolio based facts and to estimate the joint restrictions they put on models of currency returns subject to standard assumptions on investors information sets we find that the forward premium puzzle fpp and the dollar trade anomaly are intimately linked both are driven almost exclusively by the cross time component by contrast the carry trade anomaly is driven largely by cross sectional violations of uip the simplest model that the data do not reject features a cross sectional asymmetry that makes some currencies pay permanently higher expected returns than others and larger time series variation in expected returns on the u s dollar than on other currencies importantly conventional estimates of the fpp are not directly informative about expected returns because they do not correct for uncertainty about future mean interest rates once we correct for this uncertainty we never reject the null that investors expect high interest rate currencies to depreciate not appreciate

bargaining bonding and partial ownership this article provides a theory of interfirm partial ownership we consider a setting in which an upstream firm can make two alternative types of invest ment either specific investment that only a particular downstream firm can use or general investment that any downstream firm is capable of using when the benefits from specific and general investments are both stochastic equity partic ipation by the downstream firm in the upstream firm can lead to more efficient outcomes than take or pay contracts the optimal ownership stake of the down stream firm is less than 50 percent under a natural assumption about relative bargaining power

an empirical and forecasting analysis of the bioenergy market in the eu28 region evidence from a panel data simultaneous equation model this study improves upon and applies a comprehensive panel data simultaneous equation model to the european union eu28 region s bioenergy market the goals are to estimate bioenergy quantities in domestic and international markets for the period from 1990 to 2013 and to apply a forecasting analysis for the eu28 s domestic and international bioenergy markets for the period of 2014 2020 the results demonstrate that biomass harvest and the domestic price in a domestic market have a significant influence on the supply function additionally domestic price has a negative relationship with the bioenergy market domestic demand in international markets competitive import prices play a primary role in the development of the bioenergy market import demand export prices and gdp also have primary influences on the export demand for bioenergy moreover the exchange rate has a positive and significant effect on export demand the results of a forecasting analysis for the future period of 2014 2020 has predicted slight increases in domestic supply domestic demand and import trends on the other hand it also predicted a sharp decline in the export demand trend between those same years this study contributes to the literature by providing policymakers and other energy policy stakeholders a reliable forward looking analysis of the potential condition of the domestic and international bioenergy markets in the eu28 region through the end of 2020

tail events a new approach to understanding extreme energy commodity prices abstract this paper shows that extreme energy price changes located in the 10 tails of the distribution cluster across energy futures markets during the boom bust cycle of 2006 to 2012 using multinominal logit regressions we find that the coincidence of such tail events cannot be explained solely by common supply and demand fundamentals instead we provide evidence that the transmission of extreme price changes occurs through a financial demand channel specifically changes in the net long position of hedge funds are associated with a significant increase in the probability of coincident large positive and negative returns across energy markets evidence that index investments drive tail events is limited further we identify adverse shocks to speculator funding liquidity as determinant of synchronized price drops across energy markets the likelihood of extreme negative returns in more than one market significantly increases when the ted spread rises

the firm as a dedicated hierarchy a theory of the origins and growth of firms in the formative stages of their businesses entrepreneurs have to provide incentives for employees to protect rather than steal the source of organizational rents we study how the entrepreneur s response to this problem determines the organization s internal structure growth and its eventual size large steep hierarchies will predominate in physical capital intensive industries and will have seniority based promotion policies by contrast e at hierarchies will prevail in human capital intensive industries and will have up or out promotion systems furthermore e at hierarchies will have more distinctive technologies or cultures than steep hierarchies the model points to some essential differences between organized hierarchies and markets at the root of most enterprises generating economic surplus is an entrepreneur with a unique critical resource such as an idea good customer relationships a new tool or superior management technique a fundamental problem of entrepreneurship is how to enlist the cooperation of the many agents necessary for production without ceding to them too much of the surplus generated by the enterprise the risk of being expropriated however is always inherent in production in particular the entrepreneur has to give her employees whom we call managers close proximity or access to the critical resource for them to learn to produce effectively for example a manager has to understand the idea be in contact with the key customers and suppliers or even learn the entrepreneur s unique managerial techniques in order to work effectively but access also gives the manager the opportunity to expropriate this critical resource and compete against the entrepreneur managers may steal the idea walk away with clients or mimic the entrepreneur s management style and start up a rival concern the greater the access a manager has the more he can appropriate and the more effectively he can compete this paper explores the role of organizational design in

country characteristics and the incidence of capital income taxation on wages an empirical assessment this paper examines the incidence of corporate income taxes on wages using data from the us bureau of labor statistics for 13 oecd countries within a wage bargaining framework our econometric analysis shows that a substantial share of the corporate tax burden is shifted from capital to labour however the magnitude of this shift is influenced importantly by country characteristics affecting the process of wage determination such as the degree of capital mobility a country s relative influence over the world price of output and trade unions strength

the economics of intrapreneurial innovation abstract we present a model of employee firm interaction in which private intrapreneurial activity competes with the basic activity of the firm the parent firm lacks ownership over any new asset created through intrapreneurial activity but asset complementarity gives it an advantage over outsiders in the auction to develop the asset we show that a firm might tolerate or even encourage intrapreneurial activity if the complementarity is high and the innovation environment is favourable contrary to intuition higher complementarity may lead to lower innovation levels we present some empirical evidence in support of the model s predictions

was it real the exchange rate interest differential relation over the modern floating rate period in this paper we explore the relationship between real exchange rates and real interest rate differentials in the united states germany japan and the united kingdom contrary to theories based on the joint hypothesis that domestic prices are sticky and monetary disturbances are predominant we find little evidence of a stable relationship between real interest rates and real exchange rates we consider both in sample and out of sample tests one hypothesis that is consistent with our findings is that real disturbances such as productivity shocks may be a major source of exchange rate volatility this paper investigates the empirical relationship between major currency real exchange rates and real interest rates over the modern post march 1973 flexible rate experience the exchange rates examined here include the dollar mark dollar yen and dollar pound rates our two major findings are as follows first the data do not indicate a strong correspondence between real interest rate differentials short term or long term and real exchange rates this finding appears to conflict with the predictions of most monetary and portfolio balance models of exchange rate determination though the conflict can be substantially reconciled if aggregate disturbances are primarily real in nature i e changes in productivity tastes etc it is true that in many cases the sign of the estimated exchange rate interest rate differential relationship is consistent with the possible predominance of financial market disturbances but the relationship is not stable enough to be statistically significant second although one does find some evidence of a unit root in both real exchange rates and long term but not shortterm real interest differentials these two series do not appear to be linearly cointegrated hence the nonstationarity or near nonstationarity in the two series cannot be attributed to the same factor in section i we briefly describe a class of small scale monetary models of exchange rate determination the importance of this class of models for empirical work derives from its strong predictions about how the exchange rate will move

demand information and spot price information supply chains trading in spot markets abstract this paper investigates the effect of information updating on the members of a two stage supply chain in the presence of spot market the supplier decides the contract price new information becomes available as time progresses the manufacturer updates his belief on demand and or spot price and subsequently decides the contract quantity the demand and spot price are correlated thus the new demand information also updates the belief on the spot price and vice versa we model the problem with an information updating stackelberg game and derive unique equilibrium strategies previous studies have considered only the demand information and concluded that improved demand information always benefits the supplier by contrast we demonstrate that improved demand information benefits both the supplier and manufacturer if the correlation coefficient between the two uncertainties has a small positive value and benefits the manufacturer but hurts the supplier otherwise moreover superior spot price information benefits only the manufacturer and always hurts the supplier surprisingly superior information fails to improve the performance of the supply chain and only changes the allocation of the profits between the supplier and manufacturer our findings likewise provide insights into when the supplier intends to use the contract channel and which type of information updating facility or expertise to invest in if a choice must be made

the empirical merit of structural explanations of commodity price volatility review and perspectives this paper presents both the history of and state of the art in empirical modeling approaches to the world commodity price volatility the analysis builds on the storage model and key milestones in its development specifically it is intended to offer a reader unfamiliar with the relevant literature an insight into the modeling issues at stake from both a historical and speculative viewpoint the review considers primarily the empirical techniques designed to assess the merits of the storage theory it does not address purely statistical approaches that do not rely on storage theory and that have been studied in depth in other streams of the commodity price literature the paper concludes with some suggestions for future research to try to resolve some of the existing empirical flaws and hopefully to increase the explanatory power of the storage model

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

can exchange rates forecast commodity prices we show that commodity currency exchange rates have surprisingly robust power in predicting global commodity prices both in sample and out of sample and against a variety of alternative benchmarks this result is of particular interest to policy makers given the lack of deep forward markets in many individual commodities and broad aggregate commodity indices in particular we also explore the reverse relationship commodity prices forecasting exchange rates but find it to be notably less robust we offer a theoretical resolution based on the fact that exchange rates are strongly forward looking whereas commodity price fluctuations are typically more sensitive to short term demand imbalances

economic momentum and currency returns abstract past trends in fundamentals linked to economic activity and inflation predict currency returns we find that a trading strategy that goes long currencies with strong economic momentum and short currencies with weak economic momentum exhibits an annualized sharpe ratio of 0 70 and yields a significant alpha when controlling for standard carry momentum and value strategies the economic momentum strategy subsumes the alpha of carry trades suggesting that differences in past economic trends capture cross country differences in carry

facilitating the financing of bioenergy projects in sub saharan africa abstract the purpose of this paper is to identify and develop potential solutions on how to facilitate the financing of bioenergy projects in sub saharan africa we focus on four main areas that have been identified from empirical research in achieving this objective these are i financing ii markets iii trade and iv policy the sources utilised consist of primary and secondary data compilation and analysis of particular relevance are the results of a market survey undertaken on funding opportunities where the perspectives of both project developers as well as project financiers are taken into account results indicate that the four areas cannot be treated autonomously as they not only overlap but impact each other there are a number of difficulties for biofuel ventures not least the nature of the projects themselves but also around the financing and political landscape of these enterprises common solutions which cross cut the four areas are the need to raise awareness and the skillsets in areas including financing opportunities markets policy technical aspects among a range of stakeholders involved in biofuel ventures there is also a necessity to create a supporting framework for the emerging carbon trading related activities in africa

taylor rules and the deutschmark dollar real exchange rate we explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate the interest rate rule in conjunction with some standard assumptions implies that the deviation of the real exchange rate from its steady state depends on the present value of a weighted sum of inflation and output gap differentials the weights are functions of the parameters of the interest rate rule an initial look at german data yields some support for the model

exchange rate predictability the main goal of this article is to provide an answer to the question does anything forecast exchange rates and if so which variables it is well known that exchange rate fluctuations are very difficult to predict using economic models and that a random walk forecasts exchange rates better than any economic model the meese and rogoff puzzle however the recent literature has identified a series of fundamentals methodologies that claim to have resolved the puzzle this article provides a critical review of the recent literature on exchange rate forecasting and illustrates the new methodologies and fundamentals that have been recently proposed in an up to date thorough empirical analysis overall our analysis of the literature and the data suggests that the answer to the question are exchange rates predictable is it depends on the choice of predictor forecast horizon sample period model and forecast evaluation method predictability is most apparent when one or more of the following hold the predictors are taylor rule or net foreign assets the model is linear and a small number of parameters are estimated the toughest benchmark is the random walk without drift

the impact of energy prices on the volatility of ethanol prices and the role of gasoline emissions abstract the contribution of renewable energy resources is vital for a country s economic growth by providing high efficiency in energy as well as an effective tool for the confrontation of climate change in particular concerning the eu an increase in the consumption of renewable energy resources as a proportion of the total energy consumption by its member states was set as an objective until 2020 ethanol has been widely used as a substitute to conventional energy like gasoline and oil the present paper surveys the role of alternative energy prices and gas emissions in the formation of the ethanol prices the results of the empirical survey confirmed the existence of a sole relationship among the variables employed according to the results obtained an increase in the volume of emissions or in gasoline prices results in an increase in ethanol prices while the opposite is confirmed in the case of crude oil he elasticity of ethanol prices to the increase of the emissions is another result worth mentioning indicative of the significant role of the emissions in the formation of ethanol prices

uncovering the link between a flexible exchange rate and fundamentals the case of central and eastern european economies this article examines the link between a nominal exchange rate and macrofundamentals in central and eastern european cee countries we use the model based on the monetary policy rule as a theoret

the relationship between oil prices and exchange rates revisiting theory and evidence abstract this paper reviews existing theoretical and empirical research on the relationship between oil prices and exchange rates we start with theoretical transmission channels which point to bi directional causality empirical research is classified and shows that the evidence varies substantially depending on sample country choice and empirical method yet there are some common patterns i strong links between exchange rates and oil prices are frequently observed over the long run and ii either exchange rates or oil prices are a potentially useful predictor of the other variable in the short run but the effects are strongly time varying we also identify some important avenues for future research

exchange rate economics is always and everywhere controversial abstractthis article reviews the major developments in the recent literature on exchange rate economics it is argued that the link between the exchange rate and economic fundamentals is breaking new ground evidence indicates that alternative analytical frameworks such as the new open economy macroeconomics and exchange rate arrangements such as the euro have their theoretical and analytical elegance but are proving empirically very difficult to implement the role of methodological advances and alternative fundamental instruments such as world commodity prices is also highlighted

the income elasticity of money demand a meta analysis of empirical results abstract in this paper we use meta analytic methods to investigate possible sources for the large variation in empirical findings about the income elasticity of money demand our results suggest that the broadness of the monetary aggregate the inclusion of wealth and the consideration of financial innovation exert a significant influence on estimated income elasticities furthermore we find substantial cross country differences in particular between the us and other countries these differences can to some extent be explained by the macrofeconomic environment and the dissemination of payment cards

commodity currencies and the real exchange rate abstract this paper examines whether the real exchange rates of commodity exporting countries and the real prices of their commodity exports move together over time using international monetary fund imf data on the world prices of 44 commodities and national commodity export shares we construct new monthly indices of national commodity export prices for 58 commodity exporting countries over 1980 2002 evidence of a long run relationship between national real exchange rate and real commodity prices is found for about one third of the commodity exporting countries the long run real exchange rate of these commodity currencies is not constant as would be implied by purchasing power parity based models but is time varying being dependent on movements in the real price of commodity exports

commodity prices convenience yields and inflation abstract this paper provides evidence that the two leading principal components in a panel of 23 commodity convenience yields have statistically and quantitatively important predictive power for inflation even after controlling for unemployment gap and oil prices the results hold up in out of sample forecasts across forecast horizons and across g7 countries the convenience yields also explain commodity prices and can be seen as informational variables about future economic conditions as conveyed by the futures markets a bootstrap procedure for conducting inference when the principal components are used as regressors is also proposed

volatility risk premia and future commodity returns abstract this paper extends the empirical literature on volatility risk premium vrp and future returns by analyzing the predictive ability of commodity currency vrp and commodity vrp the empirical evidence throughout this paper provides support for a positive relationship of commodity currencies vrp and future commodity returns but only for the period after the 2008 global financial crisis this predictability survives the inclusion of control variables like equity vrp and past currency returns furthermore gold vrp also has the ability to predict future commodity returns however this predictability is restricted to precious metals when control variables are considered

competitive storage and commodity price dynamics by buying cheap and selling dear risk neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand commodity prices are variable and strongly positively correlated from one year to the next the variability is often explained by supply factors and the autocorrelation by the activities of speculators we show that this explanation is not consistent with the evidence speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence but not to the high levels that are observed in the data

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

european union leadership in biofuels regulation europe as a normative power the rapid emergence of the european union eu as a leader in global environmental politics has led many scholars to argue in favour of the eu being a normative power in international relations this paper critically examines the eu s biofuels policy and evaluates whether its attempts to lead by example and shape international practice in this field could support such arguments europe s biofuel policies are evaluated through a sustainable development lens so as to determine the extent to which it has embraced a holistic approach to sustainability while not dismissing that the identity of the eu is indeed an explanatory factor and that normative intentions may well be regarded as a motivating force this study argues that an interest based perspective on international environmental regulation offers a supplementary view of how an actor s preferences for an international regime are shaped by erecting barriers aimed at shielding its own inefficient domestic biofuels production the eu is in essence placing trade competitiveness and economic growth above environmental protection thus permitting sustainability concerns to be addressed only in part

the contribution of economic fundamentals to movements in exchange rates starting from the asset pricing approach of engel and west we examine the degree to which fundamentals can explain exchange rate fluctuations we show that it is not possible to obtain sharp inferences about the relative contribution of fundamentals using only data on observed monetary fundamentals money minus output differentials across countries and exchange rates we use additional data on interest rate and price differentials along with the implications of the monetary model of exchange rates to decompose exchange rate fluctuations in general we find that money demand shifts along with observed monetary fundamentals are an important contributor to exchange rate fluctuations

international bioenergy trade a review of past developments in the liquid biofuel market policies aimed to promote biofuels locally had tremendous effects on global market developments across the past decade this article develops insights into the interaction of these policies and market forces via a comprehensive collection and analysis of international production and trade data it shows that world biofuel production and trade has grown exponentially from below 30 pj in 2000 to 572 pj in 2009 for biodiesel from 340 pj in 2000 to over 1540 pj in 2009 for fuel ethanol the eu has dominated world biodiesel whereas the us and brazil have led fuel ethanol production world net biofuel trade reached 120 130 pj in 2009 and was directed towards the most lucrative markets for biodiesel this has been the eu whose imports rose to 92 pj in 2008 and remained at 70 pj in 2009 regarding fuel ethanol both the us and the eu have been prime destinations for competitively priced exports the vast majority of which originated in brazil international biofuel trade is both supply and demand driven the demand side was shaped by support policies which generally increased the domestic market value of biofuels trade developed wherever these policies prices were not accompanied by respective measures it is found that import duties largely influenced trade volumes whereas trade routes were mainly driven by tariff preferences trade regimes appear to have been designed and adapted unilaterally along national interests causing market disruptions trade inefficiencies and disputes to avoid these it is important to explicitly consider international trade implications of national trade policies a prerequisite is to improve the understanding of the underlying complex and interwoven links within the market the current lack of adequate homogeneous international reporting of biofuel production and trade statistics could be bridged via internationally standardized custom clarifications trade factor interrelations also need to be investigated further

which fundamentals drive exchange rates a cross sectional perspective standard present value models suggest that exchange rates are driven by expected future fundamentals implying that exchange rates contain information about future fundamentals we test this key empirical prediction of present value models in a sample of 35 currency pairs ranging from 1900 to 2009 employing a variety of tests we find that exchange rates have strong and significant predictive power for nominal fundamentals inflation money balances nominal gdp whereas predictability of real fundamentals and risk premia is much weaker and largely confined to the post bretton woods era overall we uncover ample evidence that future macro fundamentals drive current exchange rates

opportunities and barriers for international bioenergy trade recently the international trade of various bioenergy commodities has grown rapidly yet this growth is also hampered by some barriers the aim of this paper is to obtain an overview of what market actors currently perceive as major opportunities and barriers for the development of international bioenergy trade the work focuses on three bioenergy commodities bioethanol biodiesel and wood pellets data were collected through an internet based questionnaire the majority of the 141 respondents had an industrial background geographically two thirds were from mainly western europe with other minor contributions from all other continents results show that import tariffs and the implementation of sustainability certification systems are perceived as potentially major barriers for the trade of bioethanol and biodiesel while logistics are seen mainly as an obstacle for wood pellets development of technical standards was deemed more as an opportunity than a barrier for all commodities most important drivers were high fossil fuel prices and climate change mitigation policies concluding to overcome some of the barriers specific actions will be required by market parties and policy makers import tariffs for biofuels could be reduced or abolished linked to multinational trade agreements and harmonization including provisions on technical standards and sustainability requirements