the renewables portfolio standard in texas an early assessment texas has rapidly emerged as one of the leading wind power markets in the united states this development can be largely traced to a well designed and carefully implemented renewables portfolio standard rps the rps is a new policy mechanism that has received increasing attention as an attractive approach to support renewable power generation though replacing existing renewable energy policies with an as of yet untested approach in the rps is risky early experience from texas suggests that an rps can effectively spur renewables development and encourage competition among renewable energy producers initial rps targets in texas were well exceeded by the end of 2001 with 915 mw of wind installed in that year alone rps compliance costs appear negligible with new wind projects reportedly contracted for well under 3 us cent k wh in part as a result of a 1 7 us cent kwh production tax credit an outstanding wind resource and an rps that is sizable enough to drive project economies of scale obliged retail suppliers have been willing to enter into long term contracts with renewable generators reducing important risks for both the developer and the retail supplier finally the country s first comprehensive renewable energy certificate program has been put into place to monitor and track rps compliance c 2002 published by elsevier science ltd less

modeling skewness with the linear stochastic plateau model to determine optimal nitrogen rates accurate modeling of skewness is needed to increase the actuarial fairness of crop insurance we test day s conjecture that crop yield skewness becomes negative as nitrogen rates increase and determine how well a linear response stochastic plateau lrsp production function matches the pattern of observed skewness using four long term nitrogen experiments stillwater wheat is consistent with day s conjecture but the skewness for lahoma and altus wheat yields as well as altus cotton yields are not the lrsp assumes normal random effects and can explain only a small part of observed skewness so a new lrsp with skew normal random effects is introduced which comes closer to explaining the observed skewness and should increase the accuracy of nitrogen rate recommendations negative skewness reduced optimal nitrogen rates and positive skewness increased optimal nitrogen rates

equilibrium and government commitment abstract how should a government use the power to commit to ensure a desirable equilibrium outcome in this paper i show a misleading aspect of what has become a standard approach to this question and i propose an alternative i show that the complete description of an optimal indeed of any policy scheme requires outlining the consequences of paths that are often neglected the specification of policy along those paths is crucial in determining which schemes implement a unique equilibrium and which ones leave room for multiple equilibria that depend on the expectations of the private sector

combined heat and power s potential to meet new york city s sustainability goals abstract combined heat and power chp has been proven as a mature technology that can benefit both building owners and utility operators as the economic and environmental benefits of chp in urban centers gain recognition regulations and policies have evolved to encourage their deployment however the question remains whether these policies are sufficient in helping to achieve the larger sustainability goals such as the new york city specific goal of incorporating 800 mw of distributed generation in this paper the current regulatory and policy environment for chp is discussed then an engineering analysis estimating the potential for chp in nyc at the individual building and microgrid scale considered a city block is performed this analysis indicates that over 800 mw of individual building chp systems would qualify for the current incentives but many systems would need to undergo more cumbersome air permitting processes reducing the viable capacity to 360 mw in addition microgrid chp systems with multiple owners could contribute to meeting the goal even after considering air permits however these systems may incorporate many residential customers the regulatory framework for microgrids with multiple owners and especially residential customers is particularly uncertain therefore additional policies would be needed to facilitate their development

sophisticated monetary policies in standard monetary policy approaches interest rate rules often produce indeterminacy a sophisticated policy approach does not sophisticated policies depend on the history of private actions government policies and exogenous events and can differ on and off the equilibrium path they can uniquely implement any desired competitive equilibrium when interest rates are used along the equilibrium path implementation requires regime switching these results are robust to imperfect information our results imply that the taylor principle is neither necessary nor sufficient for unique implementation they also provide a direction for empirical work on monetary policy rules and determinacy

transforming the energy sector the evolution of technological systems in renewable energy technology this paper analyses the development and diffusion of technologies that utilize renewable energy sources in germany sweden and the netherlands the analysis enlarges the life cycle model of industry evolution to one where the focus is on the formation and evolution of new technological systems particular focus is on explaining success and failures in shifting from a formative phase into one characterized by positive feedbacks a set of challenges is identified for policy makers attempting to influence the process of transforming the energy sector

conditional exchange rate volatility and the volume of foreign trade evidence from seven industrialized countries there has long been a concern over the volatility of exchange rates and their impact on the volume of foreign trade however very little attention has been paid to the choice of an appropriate volatility variable as well as the proper specification of the trade equation the sample standard deviation of the exchange rate has been used as a proxy for exchangerate uncertainty in empirical studies that examine the effects of exchange rate uncertainty on the volume of foreign trade see for example akhtar and hilton 1 and gotur 27 these studies have provided conflicting evidence on this issue it has been argued that use of the sample standard deviation is inappropriate because the empirical distribution of exchange rates is not normal 22 10 in this regard subsequent empirical research 12 36 40 41 11 has employed a moving standard deviation of the rate of change of the exchange rate as a proxy for exchange rate uncertainty chowdhury 11 obtained a clear pattern of results that support the hypothesis that the higher volatility of exchange rates led to a reduction in international trade transactions after the breakdown of the bretton woods system in march 1973 other studies have reported ambiguous results 2 the moving standard deviation used in these studies has been criticized in the literature for a ignoring relevant information on the random process generating exchange rates 18 b underestimating the effect of volatility on decisions 52 c distorting the measurement of the volatility variable by smoothing the series 9 and d injecting an element of arbitrariness into the calculation through decisions about the order m of the moving average 43 3

production risk in multi output industries estimates from norwegian dairy farms farmers who produce multiple outputs are portfolio managers in the sense that they use inputs to balance expected economic return and variance of return this article estimates the structure of the stochastic multioutput production technology in norwegian dairy farming allowing for a more flexible specification of the technology than previous studies we find that an increase in input levels leads primarily to higher output variability and that inputs also influence the covariance of shocks between outputs risk reducing effects of inputs on outputs are primarily present in the covariance functions technical change leads to shifts in the profit distribution over the data period but no welfare improvement for risk averse farmers

determinacy and identification with taylor rules the new keynesian taylor rule theory of inflation determination relies on explosive dynamics by raising interest rates in response to inflation the fed induces ever larger inflation unless inflation jumps to one particular value on each date however economics does not rule out explosive inflation so inflation remains indeterminate attempts to fix this problem assume that the government will choose to blow up the economy if alternative equilibria emerge by following policies we usually consider impossible the taylor rule is not identified without unrealistic assumptions thus taylor rule regressions do not show that the fed moved from passive to active policy in 1980

is quantity theory still alive this paper investigates whether the quantity theory of money is still alive we argue that it is but that the slippage is not negligible for countries with low inflation the relationship between average inflation and the growth rate of money is tenuous at best a correction for variation in output growth and the opportunity cost of money using theory implied elasticities helps explain the slippage for the period since 1990 inflation targeting at low rates of inflation makes it harder to establish the long run relationship between monetary growth and inflation

testing the stochastic structure of production a flexible moment based approach conventional production function specifications are shown to impose restrictions on the probability distribution of output that cannot be tested with the conventional models these restrictions have important implications for firm behavior under uncertainty a flexible representation of a firm s stochastic technology is developed based on the moments of the probability distribution of output these moments are a unique representation of the technology and are functions of inputs large sample estimators are developed for a linear moment model that is sufficiently flexible to test the restrictions implied by conventional production function specifications the flexible moment based approach is applied to milk production data the first three moments of output are statistically significant functions of inputs the cross moment restrictions implied by conventional models are rejected

managing expectations instruments vs targets should policymakers offer forward guidance in terms of a path for an instrument such as interest rates or a target for an outcome such as unemployment we study how the optimal approach depends on a departure from rational expectations people have a limited understanding of the behavior of others and of the general equilibrium ge effects of policy the bite of such bounded rationality on implementability and welfare is minimized by target based guidance if and only if ge feedbacks are strong enough this offers a rationale for why central banks should shine the spotlight on unemployment when faced with a prolonged liquidity trap a steep keynesian cross or a large financial accelerator

fungicide use under risk in swiss wheat production abstract the short run effects of fungicide application on economic risk and the effects of risk on fungicide use in swiss wheat production are empirically explored a quadratic production function model is developed with the help of the moment based approach marginal contributions of fungicides representing controlled inputs and of rain representing uncontrolled inputs to the variances of yield and revenue are analyzed it is not possible to show risk reducing effects of fungicides on yield or revenue at low rain quantities during the vegetation period fungicides have a statistically significant risk increasing effect on revenue increasing risk leads swiss wheat growers to use more fungicide this increase is statistically significant at higher levels of revenue for example when risk is doubled fungicide inputs are raised by 44 at the highest revenue quartile

an economic analysis of soybean integrated pest management the type of pest management strategy a farmer chooses is influenced by the amount of risk associated with alternative strategies this paper examines the attractiveness of alternative pest management strategies used on a representative virginia soybean farm probability distributions of net revenue associated with alternative pest control options are simulated and then compared using generalized stochastic dominance criteria results suggest risk averse and in some cases risk preferring farmers would prefer strategies which incorporate an integrated pest management approach to pest control rather than one which relies completely on chemical pest control

on the productive value of biodiversity the paper investigates the value of biodiversity as it relates to the productive value of services provided by an ecosystem the value of biodiversity is linked with a deterioration in the functioning of the ecosystem the analysis examines how the value of an ecosystem can be greater than the sum of its parts first we propose a general measure of the productive value of biodiversity the measure involves an experiment that divides the ecosystem into sub systems that are less diverse keeping aggregate resources constant second the value of biodiversity is decomposed into four components reflecting the role of complementarity scale convexity and catalytic effects this provides new and useful information on the sources determinants and dynamics of biodiversity value

human capital adjustments in subjective probabilities and the demand for pest controls in addition to risk aversion farmer behavior in an uncertain environment is governed by subjective probability estimates of random events the estimates given here lend support to the idea that human capital development can improve farmers ability to estimate pest damage probabilities more accurate assessment of subjective probabilities leads to lower pesticide use and increases the use of labor intensive pest controls the human capital variables with the largest effects are formal schooling and farmer experience with smaller impacts from field scouting and extension schools

empowered examining self disconnection in a postal survey of electricity prepayment meter consumers in new zealand abstract prepayment metering is an electricity payment method often used by low income consumers fuel poverty is an important public health problem in new zealand and is likely to be a particular problem for those using prepayment metering this paper details a nationwide postal survey of consumers undertaken with the support of three major electricity retailers which investigated the advantages and disadvantages of using prepayment metering from a consumer perspective the study surveyed a total pool of 359 randomly selected consumers across the three companies a response rate of 48 the study found that while almost all respondents felt the benefits of using prepayment outweighed the risks of running out of credit or self disconnection 53 of respondents experienced self disconnection in the past year of concern over a third of respondents experiencing self disconnection were without electricity for more than 12 h the frequency of self disconnection was also high with 17 of those disconnecting reporting six or more events in the past year government intervention could reduce the risks and disadvantages involved with using prepayment metering which could then support initiatives aimed at reducing fuel poverty

a hybrid fiat commodity monetary system in this paper i describe a monetary system in which backing is provided for the government s liabilities by way of contingent resort to taxes the system is studied within the context of a one good pure exchange model of two period lived overlapping generations in which aside from various uniform boundedness assumptions considerable diversity is allowed both within and across generations two results are established i the existence of at least one perfect foresight competitive equilibrium and ii the pareto optimality of any such equilibrium the monetary system studied has some of the features of a commodity money system with a large seignorage spread between bid and ask prices one crucial feature of the system is that the government by taxing stands ready at any time to convert its outstanding liabilities into the commodity at an announced price in an important sense the hybrid scheme is a mixture of a fixed supply fiat scheme and a pure tax transfer scheme a social security scheme it makes some use of market pricing of net government indebtedness and some use of taxes and transfers its one advantage vis a vis the fixed supply fiat scheme is that any equilibrium under the hybrid scheme is pareto optimal for the fixed supply fiat scheme one can at best demonstrate that there exists an optimal equilibrium it is well known that there can exist nonoptimal equilibria under that scheme the presumed advantage of the hybrid scheme vis a vis the pure tax transfer scheme is its lesser use of taxes and transfers i say presumed because the framework i set out is not rich enough to imply that less use of taxes and transfers is preferable to more use of taxes and transfers

a historical review of promotion strategies for electricity from renewable energy sources in eu countries abstract the core objective of this paper is to elaborate on historically implemented promotion strategies of renewable energy sources and the associated deployment within the european electricity market hence at a first glance the historic development of renewable energy sources in the electricity res e sector is addressed on member state and on sectoral level as well as consequently discussed according to available res e potentials and costs the specific focus of this paper are promotion strategies for res e options as they are the key driver of an efficient and effective res e deployment therefore the paper depicts the main types of different promotion schemes and their properties additionally several cases studies of different european member states show an in depth analysis of the different res e promotion schemes in this context special emphasises are put on the question of effective and efficient promotion scheme designs of different res e technologies generally conducted research led to the conclusion that technology specific financial support measures of res e performed much more effective and efficient than others did hence it is not all about the common question of feed in tariffs vs quota systems based on tradable green certificates but more about the design criteria of implemented res e support schemes

wealth and volatility we document that in the us over the course of the past century there has been a systematic negative relation between household wealth and business cycle volatility we develop a microfounded dynamic equilibrium model that contains elements of a traditional keynesian framework in which economic uctuations can be driven by sunspot type uctuations in household optimism or pessimism the novel feature is that the scope for equilibrium uctuations due to sunspots depends on the exogenously given value of household wealth when wealth is high consumers demand is not sensitive to unemployment expectations and the economy is robust to condence crisis when wealth is low consumers demand is sensitive to unemployment expectations the economy becomes vulnerable to condence driven uctuations and is in general more volatile in this case there is a potential role for public policies to stabilize demand we conclude by providing micro economic evidence on the importance of wealth in aecting the sensitivity of demand to aggregate conditions we show that during the great recession consumers with low

short and long interest rate targets can both short and long term interest rates be targeted independently can the target of the term structure help solve the problem of multiplicity of equilibria that occurs when only the short rate is targeted both questions are addressed and the answer is yes to both

the new keynesian liquidity trap abstract many new keynesian models produce a deep recession with deflation at the zero bound these models also make unusual policy predictions useless government spending technical regress capital destruction and forward guidance can raise output moreover these predictions are larger as prices become less sticky and as changes are expected further in the future i show that these predictions are strongly affected by equilibrium selection for the same interest rate path equilibria that bound initial jumps predict mild inflation small output variation negative multipliers small effects of far off expectations and a smooth frictionless limit fiscal policy considerations suggest the latter equilibria

fixed feed in tariff versus premium a review of the current spanish system a b s t r a c t since 1998 the spanish government established a feed in system where res e generators could choose between two alternatives fixed feed in tariff and premium nowadays all res e 1 can be sold in the electricity market getting an additional premium except for solar photovoltaic one important novelty established in 2007 is a cap and floor system for facilities under the premium option the aim of this paper is to analyze and compare these two alternative options fixed fit and premiums which coexist at the same time in spain describe the evolution of both systems and evaluate its performance the introduction of this support system in spain led to very good results in terms of res e deployment the main advantage of the premium option is that it is a scheme integrated in the electricity market one disadvantage is that it can occasionally lead to overcompensation one way to try to avoid it is to set a cap value in order to evaluate the performance of this dual support system not only res e deployment has been assessed but also the policy stability the adequacy of res e production to the electricity demand pattern and the changes in the investors behaviour

residential implementation of critical peak pricing of electricity this paper investigates how critical peak pricing cpp affects households with different usage and income levels with the goalof informing policy makers who are considering the implementation of cpptariffs in the residential sector using a subset of data from thecalifornia statewide pricing pilot of 2003 2004 average load changeduring summer events annual percent bill change and post experimentsatisfaction ratings are calculated across six customer segments categorized by historical usage and income levels findings show thathigh use customers respond significantly more in kw reduction than dolow use customers while low use customers save significantly more inpercentage reduction of annual electricity bills than do high usecustomers results that challenge the strategy of targeting only high usecustomers for cpp tariffs across income levels average load and billchanges were statistically indistinguishable as were satisfaction ratesresults that are compatible with a strategy of full scale implementationof cpp rates in the residential sector finally the high use customersearning less than 50 000 annually were the most likely of the groups tosee bill increases about 5 percent saw bill increases of 10 percent ormore suggesting that any residential cpp implementation might considertargeting this customer group for increased energy efficiencyefforts

monetary policy and price responsiveness to aggregate shocks under rational inattention this paper presents a general equilibrium model that is consistent with recent empirical evidence showing that the u s price level and inflation are much more responsive to aggregate technology shocks than to monetary policy shocks the model of this paper builds on recent work by mackowiak and wiederholt 2009 who show that models of endogenous attention allocation deliver prices to be more responsive to more volatile shocks as everything else being equal firms pay relatively more attention to more volatile shocks in fact according to the u s data aggregate technology shocks are more volatile than monetary policy shocks inducing in this paper firms to pay more attention to the former than to the latter however most important this work adds to the literature by showing that the ability of the model of this paper to account for observed price dynamics crucially depends on monetary policy in particular this paper shows how interest rate feedback rules affect the incentives faced by firms in allocating attention a policy rate responding more actively to expected inflation and output fluctuations induces firms to pay relatively more attention to more volatile shocks this new mechanism of transmission of monetary policy helps rationalizing the observed behavior of prices in response to technology and monetary policy shocks and implies novel predictions about the impact of changes in taylor rules coefficients on economic fluctuations

what lessons have been learned in reforming the renewables obligation an analysis of internal and external failures in uk renewable energy policy abstract despite operating a delivery programme for res e since 1990 uk targets and policy goals have not been achieved in response the government reformed the ro this article re examines uk renewable energy policy by analysing the internal and external failures of the various mechanisms to determine if government has learnt from previous experience in reforming the ro government did not learn from their own actions during the nffo ro transition evidenced by high levels of similarity in internal external failures the reformed ro is expected to significantly increase deployment has provided a renewables package by comprehensively addressing both internal external failures but major internal failures price financial risk still remain resulting in contiguous failures over two decades and two mechanism changes nffo ro ro reformed ro success will again be heavily dependent on a select few technologies and new untested measures to combat external failures mechanism extension to 2037 is probably the single most important factor underlying potential deployment increases however introducing a fit like system via the sheer number of bolt on reforms to counter policy failures indicates loss of direction and clarity overall although government appears to have learnt some of its lessons from the past two decades significant doubt remains whether renewable energy policy objectives will be met via the latest mechanism change

the choice of techniques and the optimality of market equilibrium with rational expectations this paper shows that in the absence of a complete set of risk markets prices provide incorrect signals for guiding production decisions even if all individuals have rational expectations concerning the distribution of prices which will prevail on the market next period the market allocation is in general not a constrained pareto optimum essentially the only conditions under which for all technologies the market equilibrium is a constrained pareto optimum are those in which risk markets are redundant we derive the necessary and sufficient conditions for redundancy of risk markets which turn out to be extremely restrictive

the renewable portfolio standard design considerations and an implementation survey renewables have social and environmental bene ts compared to conventional electricity sources but are rarely competitive on a strict nancial cost basis this is because conventional sources are sometimes subsidized their full pollution costs are ignored and renewables involve newer higher cost technologies whose relative costs will fall with commercialization governments use several mechanisms to support renewables including direct nancial support grants loans indirect support r d demonstrations reform of nancial costs of conventional sources subsidy removal pollution taxes and the renewable portfolio standard rps the rps requires a minimum share of electricity from renewable energy sources its use is spreading because it maintains an incentive for renewable producers to reduce costs links the regulated market outcome to an environmental target and reduces government involvement although it is too early to evaluate fully its e ectiveness the survey for this study explored implementation issues in three european countries nine us states and australia and found the following the rps target is usually set to have environmental bene ts without causing signi cant price increases cost caps are sometimes used most jurisdictions limit eligibility to gridconnected domestic renewables the rps is usually applied to producers rather than consumers and to energy output not capacity flexibility mechanisms are desired but a challenge to implement administration in the us and australia is by government with delegation to independent utility regulators while in europe it is more the responsibility of government everywhere the rps is applied alongside other mechanisms of renewables support 2001 elsevier science ltd all rights reserved

nudging a promising tool for sustainable consumption behaviour abstract success of strategies for solving problems of climate change resource efficiency and environmental impacts increasingly depend on whether changes in public behaviour can and will supplement the technical solutions available to date a renewed perspective on existing policy tools and potential strategies for behaviour change are entering public debate that have implications for behaviour of individuals but that also raise critical questions about the role of the government in the society and transition to sustainability the guiding question is whether it is possible to help individuals make better decisions for themselves and society at large by overcoming limitations of human cognitive capacity and behavioural biases in order to answer these questions this article 1 analyses existing academic knowledge on nudging and choice architecture 2 investigates lessons about effectiveness of applied nudging tools and approaches in consumption domains of energy use in the home food and mobility 3 discusses opportunities and limitations for devising more successful nudges in the three consumption domains and 4 outlines critical issues concerning the legitimacy of nudging the article shows that lately applications of behavioural sciences and behavioural economics such as nudge have been helping policy makers in different countries and sectors to more systematically integrate behavioural insights into policy design and implementation however the size of the effects of policy interventions and the actual outcomes of interventions in different contexts are very diverse results from one experiment cannot be indiscriminately generalised to a different context or to a wider population the problem is the complexity of human behaviour and the diversity of factors that influence it despite that nudging is a useful strategy for inducing changes in context specific behaviour nudge tools are seen as a complement to the traditional policy instruments rather than as a substitute for laws and regulations and economic tools the article is based on the project funded by the swedish epa environmental protection agency that resulted in a report nudging advancing swedish policy making with academic insights and practical experiences of changing behaviour mont et al 2014 which served as an input to the swedish epa recommendations to the swedish government on policy measures for sustainable consumption naturvardsverket 2014

econometric estimation of producers risk attitudes general methods are proposed for the identification and econometric estimation of the parameters of the distribution of risk attitudes in a producer population the proposed methods also provide the basis for the development of statistical tests of model specification and of behavioral hypotheses econometric risk attitude estimation is shown to be possible under less restrictive conditions than previously believed a moment based version of the general model is applied to indian data and the econometrically estimated risk attitudes are presented and compared to experimental results for a similar group of producers

a cost approach to economic analysis under state contingent production uncertainty this article explores the economics of input decision under production uncertainty the article develops a methodology to specify and estimate cost minimizing input decisions under a state contingent technology the analysis is applied to time series data on u s agriculture it finds strong empirical evidence that expected output alone does not provide an appropriate representation of production uncertainty the results provide empirical support for an output cubical technology this indicates that an ex post analysis of stochastic technology appears appropriate the analysis also provides evidence that the cost of facing production risk has declined in u s agriculture over the last few decades copyright 2008 oxford university press

research of heat metering development situation and application effect evaluation model in china abstract in spite of over 10 years of heat metering promotion in china there still lays a certain gap between actual application and expectation in this paper the author conducts a comprehensive carding of china s current situation of heat metering in the aspects of policy price application area technical roadmap product quality and so on an application effect evaluation model is established based on the geometric mean weights method assignments and weighs of factors in the model are achieved via multi agent wide range of questionnaires comparisons are made among model results results published by liu xin and the results released from the ministry of housing and urban rural development of the people s republic of china mohurd which proves rationality and high accuracy of the model established in this paper evaluation results show that application of heat metering in 2012 requires improvement with the score pegged at 60 7 it is suggested that policy support from national government should be strengthened the impact of policies released by provincial government be curbed and heat metering pricing be increasingly reasonable application conditions of different metering techniques routes need to be clarified and relevant standards need to be revised to improve the operation

social implications of residential demand response in cool temperate climates residential electrical demand response dr offers the prospect of reducing the environmental impact of electricity use and also the supply costs however the relatively small loads and numerous actors imply a large effort response ratio residential dr may be an essential part of future smart grids but how viable is it in the short to medium term this paper reviews some dr concepts then evaluates the propositions that households in cool temperate climates will be in a position to contribute to grid flexibility within the next decade and that that they will allow some automated load control examples of demand response from around the world are discussed in order to assess the main considerations for cool climates different tariff types and forms of control are assessed in terms of what is being asked of electricity users with a focus on real time pricing and direct load control in energy systems with increasingly distributed resources the literature points to the significance of thermal loads supply mix demand side infrastructure market regulation and the framing of risks and opportunities associated with dr in concentrating on social aspects of residential demand response the paper complements the body of work on technical and economic potential

optimal fiscal and monetary policy equivalence results in this article we analyze the implications of price setting restrictions for the conduct of cyclical fiscal and monetary policy we consider standard monetary economies that differ in the price setting restrictions imposed on the firms we show that independently of the degree or type of price stickiness it is possible to implement the same efficient set of allocations and that each allocation in that set is implemented with policies that are also independent of the price stickiness in this sense environments with different price setting restrictions are equivalent

fiscal policy in an expectations driven liquidity trap we study the effects of fiscal policy interventions in a liquidity trap in a model with nominal rigidities and an interest rate rule in a liquidity trap caused by a self fulfilling state of low confidence higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding instead cuts in marginal labor tax rates are inflationary and become more expansionary when the zero lower bound is binding these findings contradict popular views about the effects of fiscal policy in a liquidity trap

the mediating role of social workers in the implementation of regional policies targeting energy poverty abstract this paper aims to provide a socio political reflection of the role played by social workers in regional policies and of the real needs of households affected by energy poverty the paper also examines the impact of technical specialised training on the ability of social workers to prevent and mitigate conditions of household energy poverty in europe the adoption of a research action participation methodological framework and a training research approach has permitted the opinions of social workers to be collected through surveys and their central role in implementing regional policies to be highlighted the conclusions obtained have made possible the construction of a self diagnosis and data collection tool which increases the ability of social workers to mediate and implement urgent mitigation measures for energy poverty finally regional policies which aim to mitigate household energy poverty are examined from the professional perspective of social workers

optimal fiscal and monetary policy with sticky prices in this paper i consider the role of state contingent inflation as a fiscal shock absorber in an economy with nominal rigidities i study the ramsey equilibrium in a monetary model with distortionary taxation nominal non state contingent debt and sticky prices with sticky prices the ramsey planner must balance the shock absorbing benefits of state contingent inflation against the associated resource misallocation costs for government spending processes resembling post war experience introducing sticky prices generates striking departures in optimal policy from the case with flexible prices for even small degrees of price rigidity optimal policy displays very little volatility in inflation tax rates display greater volatility compared to the model with flexible prices with sticky prices tax rates and real government debt exhibit behavior similar to a random walk for government spending processes resembling periods of intermittent war and peace optimal policy displays extreme inflation volatility even when the degree of price rigidity is large as the variability in government spending increases smoothing tax distortions across states of nature becomes increasingly important and the shock absorber role of inflation is accentuated

what do we know about the study of distributed generation policies and regulations in the americas a systematic review of literature abstract policy makers are increasingly in search for evidence based solutions for meeting contemporary challenges of energy services that are both low carbon and sustainable one of the emerging trends are policies and regulations that incent distributed electricity generation dg the question that this article addresses is what is the current state of the study of these policies or regulations in the americas the focus on the americas was chosen because the article is part of a larger research project that explores regulations for dg in brazil and canada this article uses a non traditional means for synthesizing academic work systematic literature review to explore the current state of peer reviewed publications on the subject it is a means of transparently locating evaluating and synthesizing information to avoid bias in data collection in total 87 articles were included in the review climate change is the main driving force for dg as identified in the articles job creation or the green economy was cited as a motivating factor more strongly in north america while in the southern countries the issue of diversifying the energy mix and avoiding infrastructure costs was more pronounced many articles dealt with the issue of mechanisms for incenting dg and over half of these focused on aspects of feed in tariffs incentive mechanisms vary depending on policy goals of the jurisdictions with renewable portfolio standards being more popular in the u s the review showed that there is little emphasis on the social impacts and benefits of the regulations or policies and that specific urban challenges and local governance is not widely investigated pointing to a need for future study in these areas

pests and pesticides risk and risk aversion abstract theoretical and applied literature on risk in decision making for agricultural pest control is reviewed risk can affect pesticide decision making either because of risk aversion or because of its influence on expected profit it is concluded that risk does not necessarily lead to increased pesticide use by individual farmers uncertainty about some variables such as pest density and pest mortality does lead to higher optimal pesticide use under risk aversion however uncertainty about other important variables such as output price and yield leads to lower optimal levels of pesticide use neglect of these variables in most studies has led to the false assumption that pesticides are always risk reducing inputs furthermore there is evidence that in general the pesticide dosage which maximises expected profit is lower under risk than under certainty depending on the balance of forces to increase and decrease pesticide use under risk in many circumstances the net effect of risk on optimal decision making for pest control may be minimal the effect on risk of information about pest density and other variables as in integrated pest management programmes is discussed evidence on this issue is mixed a range of analytical techniques for analysing risk in pest control is reviewed throughout the paper gaps in the existing literature are identified

german energiewende and the heating market impact and limits of policy the german energiewende envisages achieving a climate neutral building stock in 2050 by means of two major pillars of regulation first residential buildings should consume 80 less primary energy and second the remaining energy demand should be covered primarily with renewables this paper simulates the future german heating market under different policy scenarios in order to evaluate the impact and limits of recent and conceivable policies the investigation is based upon a dual model approach linking a residential heating model to a discrete choice model the major finding is that current regulations are not suitable for the achievement of governmental targets scenario calculations show that additional carbon emission reductions triggered by the current regulatory regime are falling short of expectations in terms of economic efficiency all calculated policy alternatives outperform the regulation currently in place this allows to draw the conclusion that carbon emission reductions can be achieved without a major increase in cost the model results highlight two policy implications first a rising mandatory share of renewables in the heating market is needed for target achievement and can be cost effectively second renewable obligations for heating systems must include the existing building stock to achieve the postulated political targets

measuring stochastic technology the case of tulare milk production the flexible moment based approach to production analysis is used to measure the stochastic structure of large scale dairy production in tulare county california this approach is flexible because it does not impose restrictions on the relationships between decision variables and the moments of the probability distribution of output the parameter estimates support the hypothesis that second and third moments are functions of inputs and indicate that capital intensive dairies are riskier the implied behavior of a risk averse dairy manager changed markedly when the effects of inputs on the skewness of the output distribution were included in a decision model

on crop biodiversity risk exposure and food security in the highlands of ethiopia this paper investigates the effects of crop genetic diversity on farm productivity and production risk in the highlands of ethiopia using a moment based approach the analysis uses a stochastic production function capturing mean variance and skewness effects welfare implications of diversity are evaluated using a certainty equivalent measured as expected income minus a risk premium reflecting the cost of risk we find that the effect of diversity on skewness dominates its effect on variance meaning that diversity reduces the cost of risk the analysis also shows that the beneficial effects of diversity

assessing the strength and effectiveness of renewable electricity feed in tariffs in european union countries in the last two decades feed in tariffs fit have emerged as one of the most popular policies for supporting renewable electricity res e generation a few studies have assessed the effectiveness of res e policies but most ignore policy design features and market characteristics e g electricity price and production cost that influence policy strength we employ 1992 2008 panel data to conduct the first econometric analysis of the effectiveness of fit policies in promoting solar photovoltaic pv and onshore wind power development in 26 european union countries we develop a new indicator for fit strength that captures variability in tariff size contract duration digression rate and electricity price and production cost to estimate the resulting return on investment we regress this indicator on added res e capacity using a fixed effects specification and find that fit policies have driven solar pv development in the eu however this effect is overstated without controlling for country characteristics and is concealed without accounting for policy design we do not find robust evidence that fit policies have driven wind power development overall we show that the interaction of policy design electricity price and electricity production cost is a more important determinant of res e development than policy enactment alone

the economic threshold with a stochastic pest population a real options approach using real options this paper formulates an optimal stopping model for applying pest control measures when the density of a pest population varies randomly a delay between successive pesticide applications is introduced to analyze the farmer s expected marginal cost of reentry this model is applied to the control of a foliar pest of apples via a pesticide and solved numerically a sensitivity analysis shows that the pest density that should trigger pesticide use can vary significantly with the pest density volatility incorporating pest randomness into simple decision rules may thus help better manage the chemicals applied to soils and crops

metering eu policy and implications for fuel poor households abstract fuel poverty is a function of household energy consumption income and the cost of delivered energy the paper discusses ways in which current eu policy on the development of smart metering could affect fuel poor households the main focus is on developments in electricity metering and the development of active demand and smart grids so that demand can be matched closely with available supply advances in metering and related technologies open the way to time of use charging easier switching between suppliers and between credit payment and prepayment direct load control of some end uses by the utility greater scope for microgeneration and improved consumption feedback for customers these options open up both uncertainties and risks the paper offers definitions and discussion of various functions of smart metering summarizes the eu policy background and considers some possible equity implications of rolling out a new generation of meters there follows an assessment of potential implications to the fuel poor of changes to metering based on a review of the literature on energy feedback tariffing and supplier customer relationships much of the discussion is based on the uk experience with examples from other eu member states and where appropriate from other parts of the world

cost reflective electricity pricing consumer preferences and perceptions abstract in australia residential electricity peak demand has risen steeply in recent decades leading to higher prices as new infrastructure was needed to satisfy demand one way of limiting further infrastructure induced retail price rises is via cost reflective electricity network pricing that incentivises users to shift their demand to non peak periods empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost reflective pricing this research consulted residential electricity consumers in three australian states on their perceptions and acceptance of two cost reflective pricing scenarios time of use and peak capacity pricing and associated technologies to support such pricing smart meters in home displays and direct load control devices an energy economist presented information to focus groups on the merits and limitations of each scenario and participants views were captured almost half of the 53 participants were agreeable to time of use pricing but did not have a clear preference for peak capacity pricing where the price was based on the daily maximum demand participants recommended further information to both understand and justify the potential benefits and for technologies to be introduced to enhance the pricing options the results have implications for utilities and providers who seek to reduce peak demand

advanced metering policy development and influence structures the case of norway responding to a global trend of installing smart meters norway has taken a route of full governmental and regulatory coordination the article maps and analyses the main influences on the developments of norwegian advanced metering policy based on 12 interviews and extensive document mapping the norwegian policy developments are traced from about 1990 to 2014 divided into three phases before 2000 between 2000 and 2007 and after 2007 it finds that the main influence and push came from an increasingly united industry sector fronted by the grid utilities with respective interest organizations policy change has been boosted by years of constrained supply creating incentives for political action also developments at the eu level have been important for creating attention for smart meters while consumer groups have been less influential the national regulator nve has adapted its policy process to include external expertise in particular from the grid companies the findings confirm that influence into policy processes is a matter of financial and organizational resources and expert knowledge of particular policy relevance is the weak organization of private consumer interests into these policy streams which may be important for further policy development for distributed generation and regulation of private generation activities

econometric process models for integrated assessment of agricultural production systems this article develops the conceptual and empirical basis for a class of empirical economic production models that can be linked to site specific biophysical models for use in integrated assessment research site specific data are used to estimate econometric production models and these data and models are then incorporated into a simulation model that represents the decision making process of the farmer as a sequence of discrete and continuous land use and input use decisions an econometric process model of the dryland grain production system of the northern plains demonstrates the capabilities of this type of model to simulate decision making both within and outside the range of observed data copyright 2001 oxford university press

what drives renewable energy development abstract this viewpoint reviews renewable energy development in 14 markets that differ in market structure restructured vs not restructured use of feed in tariff fit yes vs no transmission planning anticipatory vs reactive and transmission interconnection cost allocated to a renewable generator high vs low we find that market restructuring is not a primary driver of renewable energy development renewable generation has the highest percent of total installed capacity in markets that use a fit employ anticipatory transmission planning and have loads or end users paying for most if not all of the transmission interconnection costs in contrast renewable developers have been less successful in markets that do not use a fit employ reactive transmission planning and have generators paying for most if not all of the transmission interconnection costs while these policies can lead to higher penetration of renewable energy in the short run their high cost to ratepayers can threaten the economic sustainability of renewable energy in the long run

sequential decision making in production models single equation estimates of production models usually are justified by the assumption that production inputs are chosen as part of a one period decision problem yet most production decisions in agriculture are made sequentially in this paper the farmer s optimal input choices are modeled as optimal controls in a stochastic control problem a two period cobb douglas example is used to show that sequential solutions to production problems may yield models which require either single equation or simultaneous equation estimators functional separability stochastic specification and behavior under uncertainty are discussed in the context of dynamic production models

learning from experience the development of the renewables obligation in england and wales 2002 2010 abstract the uk has enviable renewable resources both onshore wind and offshore wind wave and tidal the offshore valuation group 2010 the government has had policy mechanisms in place since 1990 to encourage these resources to be developed the current mechanism the renewables obligation ro was specifically designed to emphasise competition and therefore to fit in with the uk s overall strategic approach to energy policy however as yet it has not delivered the capacity that it was designed to do and as a result the uk faces a difficult challenge in attempting to meet european wide renewable energy targets for 2020 as well as longer term decarbonisation targets this paper explores some of the major reasons why the ro has performed so poorly to date and considers the prospects for improvement up to 2020 it concludes that the strategic emphasis on competition in the support mechanisms has played a key role in limiting renewables development but that the mechanism has changed significantly since it was introduced however these changes together with proposals for electricity market reform still do not address important elements of risk in comparison with a standard feed in tariff

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

optimality of the friedman rule in economies with distorting taxes abstract we find conditions for the friedman rule to be optimal in three standard monetary models our main contribution is to shed light on two issues in the literature first the conventional view maintains that when money is a final good its services should be taxed moreover if money demand is interest inelastic its services should be taxed heavily we show that this view is incorrect second there is an ongoing controversy about whether the optimality of the friedman rule is connected to the intermediate goods result from public finance we resolve this controversy by showing a deep connection between these results

managing beliefs about monetary policy under discretion in models of monetary policy discretionary policymaking is typically constrained in its ability to manage public beliefs however when a policymaker possesses private information policy actions serve as signals to the public about unobserved economic conditions and belief management becomes an integral part of optimal discretion policies this article derives the optimal time consistent policy for a general linear quadratic setting the optimal policy is illustrated in a simple new keynesian model where analytical solutions can be derived as well in this model imperfect information about the policymaker s output target leads to lower policy losses

investigating the real situation of greek solar water heating market solar thermal applications have been acknowledged among the leading alternative solutions endeavouring to face the uncontrollable oil price variations the gradual depletion of fossil fuel reserves and the chain environmental consequences caused by its excessive usage almost 30 years after the initial emergence of the commercial domestic solar water heating system dswhs in the european market the corresponding technology is qualified as quite mature on top of this the european commission expects that 100 000 000 m2 of solar collectors are to be installed in europe by the year 2010 to facilitate durable and environment friendly heat in this context the greek dswhss market is highly developed worldwide having a great experience in this major energy market segment the present study is devoted to an extensive evaluation of the local dswhss market including a discerning analysis of its time variation taking seriously into account the corresponding annual replacement rate accordingly the crucial techno economic reasons limiting the dswhss penetration in the local heat production market are summarized and elaborated subsequently the national policy measures aiming to support the dswhss in the course of time are cited in comparison with those applied in other european countries next the financial attractiveness of a dswhs for greek citizens is examined in the local socio economic environment the present work is integrated by reciting the prospects and mustering certain proposals that if applied could stimulate the local market as a general comment the outlook for penetration of new dswhss in the local market is rather grim as the current techno economic situation of solar heat cannot compete with oil and natural gas heat production unless the remarkable social and environmental benefits of solar energy are seriously considered hence the greek state lacks stimulus to further dswhss installations being strongly in support of the imported natural gas as a result the future of domestic solar thermal market and the survival possibilities of the local manufacturers are at stake

speculative runs on interest rate pegs abstract we analyze a new class of equilibria that emerges when a central bank conducts monetary policy by setting an interest rate as an arbitrary function of its available information and letting the private sector set the quantity traded these equilibria involve a run on the central bank s interest target whereby money grows fast private agents borrow as much as possible against the central bank and the shadow interest rate is different from the policy target we argue that these equilibria represent a particular danger when banks hold large excess reserves such as is the case following periods of quantitative easing our analysis suggests that successfully managing the exit strategy requires additional tools beyond setting interest rate targets and paying interest on reserves in particular freezing excess reserves or fiscal policy intervention may be needed to fend off adverse expectations

optimal fiscal and monetary policy under sticky prices this paper studies optimal fiscal and monetary policy under sticky product prices the theoretical framework is a stochastic production economy without capital the government finances an exogenous stream of purchases by levying distortionary income taxes printing money and issuing one period nominally risk free bonds the main findings of the paper are first for a miniscule degree of price stickiness i e many times below available empirical estimates the optimal volatility of inflation is near zero this result stands in stark contrast with the high volatility of inflation implied by the ramsey allocation when prices are flexible the finding is in line with a recent body of work on optimal monetary policy under nominal rigidities that ignores the role of optimal fiscal policy second even small deviations from full price flexibility induce near random walk behavior in government debt and tax rates third sluggish price adjustment raises the average nominal interest rate above the one called for by the friedman rule finally an interest rate feedback rule whereby the nominal interest rate depends on inflation and output fits well the data emanating from the ramsey economy however the fitted rule is not of the taylor type for the implied inflation coefficient is less than one and close to zero and the output coefficient is negative jel classification e52 e61 e63

pesticide use environmental spillovers and efficiency a dea risk adjusted efficiency approach applied to dutch arable farming pesticides are widely used by crop producers in developed countries to combat risk associated with pests and diseases however their indiscriminate use can lead to various environmental spillovers that may alter the agricultural production environment thus contributing to production risk this study utilises a data envelopment analysis dea approach to measure performance of arable farms incorporating pesticides environmental spillovers and output variance as undesirable outputs in the efficiency analysis and taking explicitly into account the effect of pesticides and other inputs on production risk the application focuses on panel data from dutch arable farms over the period 2003 2007 a moment approach is used to compute output variance providing empirical representations of the risk increasing or decreasing nature of the used inputs finally shadow values of risk adjusted inputs are computed we find that pesticides are overused in dutch arable farming and there is a considerable evidence of the need for decreasing pesticides environmental spillovers

fostering a renewable energy technology industry an international comparison of wind industry policy support mechanisms this article examines the importance of national and sub national policies in supporting the development of successful global wind turbine manufacturing companies we explore the motivations behind establishing a local wind power industry and the paths that different countries have taken to develop indigenous large wind turbine manufacturing industries within their borders this is done through a cross country comparison of the policy support mechanisms that have been employed to directly and indirectly promote wind technology manufacturing in 12 countries we find that in many instances there is a clear relationship between a manufacturer s success in its home country market and its eventual success in the global wind power market whether new wind turbine manufacturing entrants are able to succeed will likely depend in part on the utilization of their turbines in their own domestic market which in turn will be influenced by the annual size and stability of that market consequently policies that support a sizable stable market for wind power in conjunction with policies that specifically provide incentives for wind power technology to be manufactured locally are most likely to result in the establishment of an internationally competitive wind industry

devising renewable heat policy overview of support options renewable energy sources of heat offer the substantial economic environmental and social benefits associated with renewable electricity but policy to support their expansion is considerably less advanced the potential for applying various support instruments to renewable heat is considered with advantages and disadvantages discussed c 2012 published by elsevier ltd

the story of the moment risk averse cypriot farmers respond to drought management this article illustrates the importance of estimating risk preferences when evaluating water policy using agricultural production data from the kiti region of cyprus we estimate farmers risk preferences a la antle journal of business and economic statistics 1 192 201 1983 american journal of agricultural economics 69 509 22 1987 and show sensitivity to higher order moments of profit such as skewness we show that farmers in the kiti region are risk averse with risk premiums in the region of 20 of expected profit we use these estimates to analyse the impact of a water quota from the perspective of three policy makers who differ only in their understanding of farmers risk preferences we show in the case of kiti that policy makers who model risk preferences incorrectly that is either a assume risk neutrality or b ignore down side risk wrongly predict the magnitude and direction of input responses and therefore the magnitude of welfare changes this highlights the importance of accomm

the government spending multiplier in a mis managed liquidity trap i study the impact of a government spending shock in a new keynesian model when monetary policy is set optimally in this framework the economy is at the zero lower bound but expectations are well managed by the central bank as such the multiplier effect of government spending increases on expected inflation is small while the one on output can be larger than one this is consistent with recent empirical evidence on the effects of the 2009 arra

uk innovation systems for new and renewable energy technologies drivers barriers and systems failures abstract a better understanding of the systemic processes by which innovation occurs is useful both conceptually and to inform policy making in support of innovation in more sustainable technologies this paper analyses current innovation systems in the uk for a range of new and renewable energy technologies and generates policy recommendations for improving the effectiveness of these innovation systems although incentives are in place in the uk to encourage innovation in these technologies system failures or gaps are identified in moving technologies along the innovation chain preventing their successful commercialisation sustained investment will be needed for these technologies to achieve their potential it is argued that a stable and consistent policy framework is required to help create the conditions for this in particular such a framework should be aimed at improving risk reward ratios for demonstration and pre commercial stage technologies this would enhance positive expectations stimulate learning effects leading to cost reductions and increase the likelihood of successful commercialisation