modeling gas markets with endogenous long term contracts since its initial development long term contracts have been associated with the gas industry in all regions of the world this was also the case in europe where natural gas trade was for a long time dominated by bilateral long term agreements between producers and midstreamers these contracts fixed a minimum volume to be exchanged take or pay and indexed the gas price using a price formula that usually referred to oil product prices these arrangements allowed market risk sharing between the producer who takes the price risk and the midstreamer who takes the volume risk they also offered risk hedging since oil is considered as a trusted commodity by investors the fall of the european natural gas demand combined with the increase of the oil price favored the emergence of a gas volume bubble that caused significant losses for most of the european midstreamers bound by long term agreements as a result the downstream part of the industry brought forward the idea of indexing contracts on gas sp

supply storage and service reliability decisions by gas distribution utilities a chance constrained approach this paper explores the trade offs among purchases storage and service reliability decisions faced by natural gas distribution utilities the short term demand for natural gas fluctuates because of the weather to encourage load leveling the pipeline transmission companies that supply the utilities use a demand contract that charges utilities based on their peak day needs and often charge for a minimum daily purchase requirement whether that purchase is made or not the policy variables available to the utility include increasing its storage capacity and providing interruptible service to some customers thereby lowering reliability of service there are also technological constraints on the maximum storage gas flows to explore these trade offs a chance constrained cost minimization problem is formulated two decision rules for gas purchases and storage operation are examined in these rules an initial decision is made at the beginning of each month about either the level of purchases or the level of

strategic eurasian natural gas market model for energy security and policy analysis formulation and application to south stream abstract the mathematical formulation of a strategic eurasian natural gas market model is presented the model represents horizontal oligopolistic relationships among producers bilateral market power between producer russia and transit ukraine countries detailed transport constraints and operation decisions over a 20 year time horizon to demonstrate the model s capabilities a financial and market analysis of the proposed south stream gas pipeline from russia via the black sea to south europe is summarized insights obtained include the following first expectations of high demand growth in europe and or transit risks do not justify the construction of the south stream pipeline because under all demand and ukraine transit interruption scenarios the net benefits to the south stream participants are negative the npv ranges from 1 9 billion bn to 7 4 bn second ukraine s perception of high transit market power vis a vis russia may trigger the construction of the otherwise unprofitable south stream project thus under ukraine s high transit market power scenario the npv of south stream ranges between 2 4 bn and 24 5 bn third we find that the south stream investment increases the efficiency of the european gas market under the following conditions i when gas demand in europe grows 2 per year up to 2030 ii when ukraine poses high transit market power or iii under a combination of severe transit risks through ukraine and low demand scenarios in europe it should be noted that the value of south stream to both its project sponsors and the market as a whole is much higher when ukraine exercises transit market power than under the high demand scenario therefore whether ukraine is likely to wield market power is crucial to the success of the south stream project because that is the only scenario in which the project yields both a positive expected npv to its sponsors and the highest value to the market as a whole

an expository note on individual risk without aggregate uncertainty abstract in economies where agents bear some risk the analysis would often be facilitated by the assumption that the risks are i i d and disappear in the aggregate a formal appeal to the law of large numbers requires the consideration of a sequence of finite economies in an economy with a continuum of agents there are countable families of sets for which it is impossible for a law of large numbers to be valid with countably many agents and a finitely additive measure independence is compatible with the law of large numbers

the development of a natural gas transportation logistics management system abstract efficient management of the natural gas business chain based on pipeline transmission networks and taking into consideration the interaction among the main players e g shippers suppliers transmission companies and local distribution companies requires the use of decision making support systems these support systems maximise resources and mitigate contingencies due to gas supply shortfalls operational contingencies from scheduled and non scheduled equipment outages and market demand shortfalls this study presents a practical use for technologies such as a thermohydraulic simulation of gas flow through pipelines a monte carlo simulation for compressor station availability studies an economic risk evaluation related to potential revenue losses and contractual penalties and linear programming for the maximisation of income and the minimisation of contractual penalties the proposed system allows the optimum availability level to be defined and maintained by the transporter by installing reserve capacity to mitigate losses related to revenue and contractual penalties it also economically identifies quantifies and justifies the installation of stand by compressor units that can mitigate the transporter s exposure to losses caused by capacity shortfalls as a consequence of scheduled and non scheduled outages

estimating the stock flow matching model using micro data we estimate the stock flow matching model using micro level data from a well defined labor market using a dataset of complete labor market histories for both sides of the market we estimate hazard functions for job seekers and vacancies we find that the stock of new vacancies has a significant positive impact on the job seeker hazard over and above that of the total stock of vacancies there is an even stronger robust result for vacancy hazards thus we find evidence in favor of stock flow matching even when controlling for unobserved search heterogeneity and stratifying into submarkets defined by location and occupation

a mixed complementarity based equilibrium model of natural gas markets we present a new multiseasonal multiyear natural gas market equilibrium model based on the concept of a competitive equilibrium involving the market participants producers storage reservoir operators peak gas operators pipeline operators marketers and consumers the first three classes are depicted as price takers consistent with perfect competition the pipeline operations are described with regulated tariffs but also involve congestion pricing as a mechanism to allocate scarce pipeline capacity the marketers are price takers in all markets except in sales to consumers in which they compete as nash cournot players finally consumers are described by demand curves for each of the four sectors residential commercial industrial and electric power we show that the equilibrium model is an instance of a mixed nonlinear complementarity problem ncp and provide sufficient detail not generally seen in previous complementarity models of natural gas the ncp formulation is derived from considering the karush kuhn tucker optimality conditions of the optimization problems faced by these participants under mild conditions we show that this ncp has a solution and under additional reasonable conditions we show that the market prices are unique we also validate the model on a representative sample network with nine market participants and three seasons using four scenarios

a complementarity model for the european natural gas market abstract in this paper we present a detailed and comprehensive complementarity model for computing market equilibrium values in the european natural gas system market players include producers and their marketing arms which we call traders pipeline and storage operators marketers lng liquefiers regasifiers tankers and three end use consumption sectors the economic behavior of producers traders pipeline and storage operators liquefiers and regasifiers is modeled via optimization problems whose karush kuhn tucker kkt optimality conditions in combination with market clearing conditions form the complementarity system the lng tankers marketers and consumption sectors are modeled implicitly via appropriate cost functions aggregate demand curves and ex post calculations respectively the model is run on several case studies that highlight its capabilities including a simulation of a disruption of russian supplies via ukraine

marketplaces and matching this paper models equilibrium trading patterns when marketplaces exist and goods are differentiated when first visiting the market a buyer samples a stock of goods if fortunate the buyer matches with and purchases one of these goods and then exits the market if an initial match does not exist the buyer can now only match with the flow of new goods for sale the previous stock has been sampled and rejected in a steady state the current stock of unmatched traders on one side of the market is trying to match with the flow of new traders on the other side it is shown that this market behaviour describes matching patterns between unemployed job seekers and vacancies in uk job centres

energy supply security and geopolitics a european perspective the security of energy supply to the eu is examined in the context of two storylines markets and institutions exemplifies an economically and politically integrated multilateral world with effective institutions and markets regions and empires involves a world broken up in rival political and economic blocks competing for resources and markets via political economic and military power it is shown that these storylines have a significant impact on the development of the energy market on the way in which energy supply may be secured and on the effect and applicability of the several types of instruments available the current eu is geared towards enlargement and a deepening of economic integration based on the tenets of the post 1945 multilateral world system the present world tends towards regions and empires and suggests that the eu may have to reorient its energy security policy energy policy must become an integral part of eu external trade and foreign relations and security policy the eu should develop its own strategy actively investing in dialogues with producer countries in the persian gulf and africa and with russia sustainable prosperity and governance in these regions will support eu energy security

examining market power in the european natural gas market in this paper we develop a mixed complementarity equilibrium model for the european natural gas market this model has producers as cournot players with conjectured supply functions relative to their rivals as such these producers can withhold production to increase downstream prices for greater profits the other players are taken to be perfectly competitive and are combined with extensive pipeline seasonal and other data reflecting the current state of the market four market scenarios are run to analyze the extent of market power by these producers as well as the importance of pipeline and storage capacity

what about coal interactions between climate policies and the global steam coal market until 2030 because of economic growth and a strong increase in global energy demand the demand for fossil fuels and therefore also greenhouse gas emissions are increasing although climate policy should lead to the opposite effect the coal market is of special relevance as coal is available in many countries and often the first choice to meet energy demand in this paper we assess possible interactions between climate policies and the global steam coal market possible market adjustments between demand regions through market effects are investigated with a numerical model of the global steam coal market the coalmod world model this equilibrium model computes future trade flows infrastructure investments and prices until 2030 we investigate three specific designs of climate policy a unilateral european climate policy an indonesian export limiting policy and a fast roll out of carbon capture and storage ccs in the broader context of climate policy and market constraints we find that market adjustment effects in the coal market can have significant positive and negative impacts on the effectiveness of climate policies

stock flow matching this paper develops and quantifies the implications of the stock flow matching model for unemployment job vacancies and worker flows workers and jobs are heterogeneous so most worker job pairs cannot profitably match leading to the coexistence of unemployed workers and job vacancies productivity shocks cause fluctuations in the number of active jobs which in turn cause fluctuations in labor market outcomes we derive exact expressions for employment and worker transition rates in a finite economy and analyze their limiting behavior in a large economy a calibrated version of the model is consistent with the co movement of labor market variables observed in u s data and can explain about one third of their volatility

natural gas corridors between the eu and its main suppliers simulation results with the dynamic gastale model abstract growth in gas demand poses a challenge for european energy consumers and other gas importing countries in terms of an increasing dependency on gas imports and consequently also supply security this paper focuses on interactions among demand supply and investments in natural gas corridors namely pipeline transport lng and storage facilities affecting the european natural gas market over the period 2005 2030 a number of policy scenarios including a business as usual bau scenario are formulated to study the impact of demand uncertainty and delays in investment on the gas transport infrastructure required in the long run in europe the analyses indicate that substantial investments in gas transport corridors are needed to accommodate imports and seasonal demand variations analysis of scenarios of supply interruption in the form of suddenly reduced import capacity for particular pipeline routes indicates that portions of europe could experience price increases of up to 100 in the case of a year long interruption to accommodate import needs and to mitigate possible disruptions pipeline connections running from east to west need to be given special priority

the long side of the market and the short end of the stick bargaining power and price formation in buyers sellers and balanced markets the determinants of bargaining power and price formation in a dynamic exchange market where new traders enter randomly over time are studied when agents on the long side of the market possess the option to wait for the arrival of future partners the terms of trade in the spot market must honor the value of this option the equilibrium terms of trade are expressed in intuitive closed form equations that highlight the distinct influences of short run spot market conditions and long run market demographics i introduction few concepts in economics are as intuitive as the idea that traders on the long side of a market wind up holding the short end of the stick that is they receive little or none of the gains from trade consider for instance the classic setting in which b identical buyers each with unit demands for an indivisible homogeneous good face s identical sellers each with one unit of the good for sale it is well known that in a broad class of one shot trading games all of the surplus in this setting goes to the short side of the market in equilibrium that is if b s buyers bid the price up to their reservation value often it is only when b s that market institutions the rules of the game have any bearing on the equilibrium division of surplus this classic result is somewhat brittle because of the discontinuity in the terms of trade when moving from positive to negative levels of excess demand its logic is familiar however from bertrand competition and it is very compelling the option value to an agent frozen out of a trade in a one shot market game is his reservation payoff of zero any outcome that confers nonzero surplus to a long side agent cannot be sustained in equilibrium because all of the long side agents who would otherwise be frozen out possess a strict incentive to undercut

a strategic model of european gas supply gasmod abstract this paper presents a model of the european natural gas supply gasmod which is structured as a two stage game of successive natural gas exports to europe upstream market and wholesale trade within europe downstream market and which explicitly includes infrastructure capacities we compare three possible market scenarios cournot competition in both markets perfect competition in both markets and perfect competition in the downstream with cournot competition in the upstream market eu liberalization we find that cournot competition in both markets is the most accurate representation of today s european natural gas market where suppliers at both stages generate a mark up at the expense of the final customer double marginalization our results yield a diversified supply portfolio with newly emerging lng exporters gaining market shares enforcing competition in the european downstream market would lead to lower prices and higher quantities by avoiding the welfare reducing effects of double marginalization binding infrastructure capacity restrictions strongly influence the results and we identify bottlenecks mainly for intra european trade relations whereas transport capacity in the upstream market is globally sufficient in the cournot scenario

efficiency and labor market dynamics in a model of labor selection this article characterizes efficient labor market allocations in a labor selection model the model s crucial aspect is cross sectional heterogeneity for new job contacts which leads to an endogenous selection threshold for new hires with cross sectional dispersion calibrated to microeconomic data 40 of empirically relevant fluctuations in the job finding rate arise which contrasts with results in an efficient search and matching economy the efficient selection model s results hold in partial and general equilibrium as well as with sequential search abstract from author

stock flow matching and the performance of the labor market we estimate outflow equations for vacancies and unemployed workers in britain departing from the stock based analysis of matching in two ways first we deal with the temporal aggregation problem that arises when discrete time data are used to describe continuous time processes second we allow for a stock flow matching mechanism in which the stock of traders on one side of the market matches with the flow of traders on the other side our estimates are in line with the predictions of stock flow matching in terms of higher exit rates of flows and of matching combinations between labor market stocks and flows furthermore employer search effectiveness did not seem to decline between the 1960s and the 1990s nevertheless some deterioration in worker search effectiveness is detected however less severe than that implied by previous stock based work

a simulation approach for analysis of short term security of natural gas supply in colombia abstract achieving security of gas supply implies diversifying gas sources while having enough supply transportation and storage capacity to meet demand peaks and supply interruptions devising a strategy for securing gas supply is not straightforward because gas supply depends on complex interactions of production demand and infrastructure and it is exposed to economic regulatory political environmental and technical risks to address this complexity we propose a simulation approach that replicates the structure of the gas supply chain including transportation constraints and demand fluctuations we build and calibrate a computer model for the colombian gas sector and run the model to assess the impact of expanding transportation capacity and increasing market flexibility on the security of supply our analysis focuses on the operation and planned and proposed expansions of the transportation infrastructure because adequate regulation and development of this infrastructure can contribute to increase the security of supply in the gas sector we find that proposed import facilities specifically lng import terminals at buenaventura increase system s security under the current market structure

the dynamic effects of neutral and investment specific technology shocks the neoclassical growth model is used to identify the short run effects of neutral technology shocks which affect the production of all goods homogeneously and investment specific shocks which affect only investment goods the real equipment price crucial for identifying the investment shocks experiences an abrupt increase in its average rate of decline in 1982 so the analysis is based on a split sample on the basis of the preferred specification the two technology shocks account for 73 percent of hours and 44 percent of output s business cycle variation before 1982 and 38 percent and 80 percent afterward the shocks also account for more than 40 percent of hours and 58 percent of output s forecast errors over a three to eight year horizon in both samples the majority of these effects are driven by the investment shocks

the establishment level behavior of vacancies and hiring this paper is the first to study vacancies hires and vacancy yields at the establishment level in the job openings and labor turnover survey a large sample of u s employers to interpret the data we develop a simple model that identifies the flow of new vacancies and the job filling rate for vacant positions the job filling rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section it falls with employer size rises with worker turnover rates and varies by a factor of four across major industry groups we also develop evidence that the employer level hiring technology exhibits constant returns and that at the employer level and that employers rely heavily on other instruments in addition to vacancies as they vary hires we also develop evidence that effective recruiting intensity per vacancy varies over time accounting for about 41 of movements in aggregate hires in the 2007 to 2009 period our evidence and analysis provide useful inputs for assessing developing and calibrating theoretical models of search matching and hiring in the labor market

forum shopping for ex post gas balancing services the patchwork of different imbalance settlement rules in geographically adjacent gas regions induces shippers to go forum shopping to minimize costs of ex post balancing services this shopping increases efficiency and thus welfare of the shippers on the one hand the impact on net efficiency is dependent on the relative incentives provided by different balancing mechanisms and the relative system balancing costs that the transmission system operators face to offer balancing services to unbalanced shippers on the other hand if the gas balancing mechanism and the system balancing costs are aligned net efficiency in the combined gas system will rise our results demonstrate that such an outcome is not guaranteed hence market integration without properly checking compatibility of balancing rules can improve shipper efficiency at the cost of reducing overall efficiency the latter outcome should clearly be avoided by policy makers and european regulators whose primary concern should be overall efficiency as this provides fair and efficient prices for gas consumers and a higher utility for society

matching with phantoms searching for partners involves informational persistence that reduces future traders matching probability in this article traders who are no longer available but who left tracks on the market are called phantoms we examine a dynamic matching market in which phantoms are a by product of search activity no coordination frictions are assumed and non phantom traders may lose time trying to match with phantoms the resulting aggregate matching technology features increasing returns to scale in the short run but has constant returns to scale in the long run we embed a generalized version of this matching function in the canonical continuous time equilibrium search unemployment model long run constant returns to scale imply there is a unique steady state whereas short run increasing returns generate excess volatility in the short run and endogenous fluctuations based on self fulfilling prophecies

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

strategic bargaining and competitive bidding in a dynamic market equilibrium this paper extends the bargaining and matching literature such as rubinstein 1985 and gale 1986 and 1987 by considering a new matching process we assume that a central information agency exists such as job centres and newspapers in the labour market or real estate agents in the housing market which puts potential traders into direct contact with each other with agent heterogeneity equilibrium trade is characterized by existing traders on the other side since existing traders have already sampled and rejected each other two procedures of trade coexist namely strategic bilateral bargaining and a competitive bidding process depending on the number of potential matches a new trader obtains we characterize the unique symmetric markov perfect equilibrium to this stochastic trading game

the beveridge curve a survey important progress has been made in economists understanding of the beveridge curve from its measurement to its expression in canonical labor market models yet enduring puzzles remain chief among these are the empirical role of vacancies in the recruitment process the amplitude comovement and persistence of cyclical unemployment vacancy dynamics and the sources of lateral shifts in the beveridge curve the synthesis of these themes identifies several priorities for ongoing research including the role of entry costs into vacancy creation in shaping beveridge dynamics the cyclicality of search intensity both off and on the job and its relation to participation and job to job transitions the theory and measurement of mismatch and the sources of hysteresis in unemployment flows