intervention policy of the boj a unified approach intervening in the fx market implies a complex decision process for central banks monetary authorities have to decide whether to intervene or not and if so when and how since the successive steps of this procedure are likely to be highly interdependent we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision process our estimations based on japanese data from 1991 to 2004 indicate that the bank of japan i mainly reacted to deviations of the exchange rate with respect to fundamentals and ii tended to favour secrecy when its credibility was low we also provide new insights on the so called secrecy puzzle by modeling explicitly the risk for a secret intervention to be detected our results have important implications in terms of exchange rate policy such as the emergence of a trade off between intervention size communication policy and secrecy our results tend to provide some explanation for the observed persistence of ineffective intervention policy during some sub periods c 2008 elsevier b v all rights reserved

status and outlook for thailand s low carbon electricity development thailand is facing an urgency to enhance its energy security and capacity to cope with global warming impacts as demands on fossil fuel consumption keep rising this paper reviewed the latest situation on renewable powers and developmental strategies toward low carbon electricity generation in thailand government recently has spent tremendous financial and legislative supports to promote the uses of indigenous renewable energy resources and fuel diversification while contributing in reduction of global greenhouse gas major policy challenge is on which types of renewable energy should be more pronounced to ensure sustainable future of the country regions in thailand present different potentials for renewable supply on biomass municipal wastes hydropower and wind to maximize renewable energy development in each area location is matter currently energy derived biomass is widely utilized within the country however if droughts happen more often and severe it will not only affect food security but also energy security life cycle of biomass energy production may cause other social issues on land and chemical uses meanwhile deployment of wind and solar energy has been slow and needs to speed up to the large extent in comparison with energy proportion from biomass nuclear power has already been included in the thai power development plan 2010 pdp 2010 however public acceptance is a major issue setting up strategic renewable energy zone to support power producer according to pre determined potential location may assist development direction furthermore government has to strongly subsidize research and development to lower technology cost and promote private investment on renewable energy industry in the future revision of electricity price is needed to allow fair competition between non renewable and renewable energy once subsidy programs are ended environmental tax according to fuel types could help government progressing toward low carbon electricity stimulating renewable energy development and utilization at local community is a key for thai sufficiency economy

asymmetric effects of federal funds target rate changes on s p100 stock returns volatilities and correlations we study the effects of fomc announcements of federal funds target rate decisions on individual stock returns volatilities and correlations at the intraday level for all three characteristics we find that the stock market responds differently to positive and negative target rate surprises first the average response to positive surprises that is bad news for stocks is larger second in case of bad news the mere occurrence of a surprise matters most whereas for good news its magnitude is more important these new insights are possible due to the use of high frequency intraday data

price formation and liquidity in the u s treasury market the response to public information the arrival of public information in the u s treasury market sets off a two stage adjustment process for prices trading volume and bid ask spreads in a brief first stage the release of a major macroeconomic announcement induces a sharp and nearly instantaneous price change with a reduction in trading volume demonstrating that price reactions to public information do not require trading the spread widens dramatically at announcement evidently driven by inventory control concerns in a prolonged second stage trading volume surges price volatility persists and spreads remain moderately wide as investors trade to reconcile residual differences in their private views how do financial markets form prices and provide liquidity when information arrives efforts to address this issue have led to an extensive microstructure literature on equity markets and to a lesser extent on the foreign exchange fx market relatively little work has focused on the u s treasury market however in spite of its importance in its own right and the advantages it offers as an alternative testing ground for microstructure hypotheses

prospects for the power sector in nine developing countries abstract based on information drawn primarily from official planning documents issued by national governments and or utilities this article examines the outlook for the power sector in the year 2000 in nine countries china india indonesia thailand the philippines south korea taiwan argentina and mexico this study found that the implicit rates of average annual growth of installed electric power capacity between 1991 and 2001 range from a low of 3 3 per year in argentina to a high 13 2 per year in indonesia in absolute terms china and india account for the vast majority of the growth the plan calls for a shift in the generating mix towards coal in six of the countries and continued strong reliance on coal in china and india the use of natural gas is expected to increase substantially in a number of the countries the historic movement away from oil continues although some countries are maintaining dual fuel capabilities plans call for considerable growth of nuclear power in south korea and china and modest increases in india and taiwan the feasibility of the official plans varies among the countries lack of public capital is leading towards greater reliance on private sector participation in power projects in many of the countries environmental issues are becoming a more significant constraint than in the past particularly in the case of large scale hydropower projects the financial and environmental constraints are leading to a rising interest in methods of improving the efficiency of electricity supply and end use the scale of such activities is growing in most of the study countries

choosing a licensee from heterogeneous rivals we examine a rm that can license its production technology to a rival when rms are heterogeneous in production costs we show that a complete technology transfer from one rm to another always increases joint pro t under weakly concave demand when at least three rms remain in the industry a jointly pro table transfer may reduce social welfare although a jointly pro table transfer from the most e cient rm always increases welfare we also consider two auction games under complete information a standard rst price auction and a menu auction by bernheim and whinston 1986 with natural re nement of equilibria we show that the resulting licensees are ordered by degree of e ciency menu auction simple auction and joint pro t maximizing licensees in weakly descending order

asymmetric oligopoly and technology transfers using a simple cournot model this paper shows that 1 if technologies are perfectly replicable then a lower cost firm has always an incentive to transfer its technology and as a result a fully asymmetric oligopoly can never be a noncooperative nash equilibrium 2 as a technology transfer between any two firms can always be disrupted by some other firm the cournot game cum technology transfer has no noncooperative nash equilibria in pure strategies and 3 there exi st nonlinear transfer payments that sustain the fully collusive outcome as an noncooperative nash equilibrium even in a finitely repeated game copyright 1993 by royal economic society

news announcements and price discovery in foreign exchange spot and futures markets abstract this paper studies competition in price discovery between spot and futures rates for the eur usd and jpy usd markets around scheduled macroeconomic announcements using both the information shares approach and the common factor component weight approach for futures prices from the chicago mercantile exchange cme as well as deal prices from spot trading on the electronic broking services ebs we gauge how foreign exchange spot and futures markets respond to news surprises the results show that the spot rates provide more price discovery than do the cme futures rates overall however the contribution of the futures rates to price discovery increases in the time surrounding macroeconomic announcement releases

broken dreams unmet expectations of investors in the philippine electricity restructuring and privatization abstract over the last three decades privatization and restructuring of electricity sectors has been a hot topic the expectation was that prices would fall due to increased competition and that generators would become more innovative and efficient however the enthusiasm for deregulation wavered after events such as the debacle in california the fall of enron and the setbacks of ontario in the philippines comprehensive legislation was passed in 2001 but the implementation has been rather slow and controversial this paper looked at the allegation of politicizing power rates and found a logical alternative to the perceived conspiracy angle based on market data it is highly probable that depressed market rates was a result of coping mechanisms of new players trying to adjust to the restructured industry

the power industry in korea the business environment for the participation of the private sector the korean government has allowed the introduction of independent power producers ipps private firms were invited to build and operate two 500 mw bituminous coal plants and two 400 mw lng plants although the stated rationale for introducing ipps is raising efficiency through competition the real forces that drive such a policy are the necessity to secure enough funds from the private sector to raise the generating capacity of the country and the need to resolve siting issues the participating firms have to carefully review various legal factors such as laws governing the electrical power business antitrust regulations which include the monopoly regulation and fair trade act and credit control by the central bank and tax laws for the successful adoption of ipps appropriate institutional changes should also be made in terms of regulatory issues alternative methods of rate regulation need to be considered in addition the changing business environment requires careful analysis and modification of the current regulatory framework to keep pace with the rapid transition in industry size and structure

reform of china s electric power industry challenges facing the government abstract china s electrical power industry requires substantial reform if the country s economic growth is to be sustained the 1997 electricity law the creation of a state power company and the abolition of the ministry of electric power are important first steps on the path of reform but it seems that a clear plan is lacking objectives of the reform should include increasing the capacity to deliver power constraining the costs of the power industry increasing end user efficiency and minimising environmental damage efforts should be directed at restructuring the industry in such a way that fair competition may be introduced at least in power generation and at establishing a viable regulatory agency both tasks have the potential to be thwarted by a range of vested interests at different levels of government and industry

analysis of oil export dependency of mena countries drivers trends and prospects abstract the purpose of this paper is to analyse how oil export dependencies of middle east and north african mena oil producers have evolved over the past two decades and to identify the main driving factors from an energy policy perspective the paper expresses the oil export dependency of each economy in terms of a multiplicative identity that captures effective export price export to primary oil supply ratio oil dependency and oil export intensity of the country using the data for 1980 2006 the evolution in these factors is investigated for seven mena countries and the influence of the above factors is decomposed using the laspeyres index the analysis shows that energy price and increasing energy intensity in the mena countries have influenced the overall oil export dependency reducing the energy intensity can improve oil export revenue share to gdp by 5 10 in most of the countries while iran can gain significantly by increasing its export volume

electricity consumption and economic growth a case study of china abstract this study examines the relationship between electricity consumption and economic growth in china during 1950 1980 the results show that the income elasticity of electricity consumption is significantly greater than one ranging from 2 33 to 2 72 and the electricity gdp ratio or electricity intensity has increased over time with the growth rate of 7 3 pa during 1950 1980 these results suggest that the policy makers in china should pay more attention to electricity conservation policies and structural changes in production

indicators of security of natural gas supply in asia natural gas has become an increasingly valuable resource and a global commodity the demand for it has significantly increased japan korea and taiwan heavily rely on liquefied natural gas lng imports for their gas supplies from malaysia brunei indonesia australia and the middle east on the other hand countries like thailand and singapore import gas via trans border pipelines gas supply interruptions volatile gas prices transportation and distribution bottlenecks and a growing reliance on imports over longer distances have renewed interest on gas security in asia this paper examines the relative vulnerability to natural gas supply disruptions of seven gas importing countries in asia for year 2008 based on four indicators of security of gas supply a composite gas supply security index is estimated as an overall indication of gas vulnerability for our sample countries the results demonstrate that there are differences in the values of the overall indicator of gas vulnerability among countries and the assessment is useful in developing an effective strategy of natural gas supply security in countries in the asian region

central bank communication and monetary policy a survey of theory and evidence over the last two decades communication has become an increasingly important aspect of monetary policy these real world developments have spawned a huge new scholarly literature on central bank communication mostly empirical and almost all of it written in this decade we survey this ever growing literature the evidence suggests that communication can be an important and powerful part of the central bank s toolkit since it has the ability to move financial markets to enhance the predictability of monetary policy decisions and potentially to help achieve central banks macroeconomic objectives however the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy

do exchange rates respond to day to day changes in monetary policy expectations when no monetary policy changes occur this paper addresses whether exchange rates respond to changes in expectations of future u s monetary policy when no actual monetary policy changes occur we employ data on federal funds futures contracts for extracting a measure of policy expectations control for the surprise element of macroeconomic news and policy developments and analyze more than 12 years of daily exchange rate data our findings show that continuous day to day changes in expectations of future monetary policy are associated in a highly significant and systematic way with day to day changes in exchange rates even when no actual monetary policy changes occur this suggests that monetary policy matters for daily exchange rate determination in more ways than merely through infrequent actual policy changes

fee versus royalty licensing in a cournot duopoly model abstract this paper finds that royalty licensing can be superior to fixed fee licensing for the patent holding firm when the cost reducing innovation is non drastic the reason for this result is that the patent holding firm enjoys a cost advantage over the licensee under royalty licensing while the two firms compete on equal footing under fixed fee licensing

the high frequency response of energy prices to u s monetary policy understanding the empirical evidence abstract this paper examines the impact of conventional and unconventional monetary policy on energy prices using an event study with intraday data three measures for monetary policy surprises are used 1 the surprise change to the current federal funds target rate 2 the surprise component to the future path of policy and 3 the unanticipated announcement of future large scale asset purchases lsap estimation results show that monetary policy surprises have economically important and highly significant effects on the level and volatility of energy futures prices and their trading volumes i find that on average a hypothetical unanticipated 100 basis point hike in the federal funds target rate is associated with roughly a 3 decrease in west texas intermediate crude oil prices i also document that in a narrow window around the fomc meeting the federal reserve s lsap1 and lsap2 programs have a cumulative financial market impact on crude oil equivalent to an unanticipated cut in the federal funds target rate of 156 basis points

structural changes in the power sector in asia improving profitability this study determined the characteristics of profitable electric utilities and those with low power rates in the dynamic asia pacific region it also examined current reforms notably structural changes regulation and privatization which are reshaping the power industry in asia the paper suggests that power industry reforms should propel electric utilities to success by also addressing the critical factors necessary for utilities to attain optimum profitability and competitive tariffs cross section analysis of utilities in asia shows that the biggest barrier to achieving higher profits is systems loss followed by inflation proportion of purchased power expense and fuel expense privately owned utilities and those in countries with a ministry of energy are also found to be more profitable according to utilities surveyed government can help utilities by granting them more autonomy equity better guidelines for ipps a more independent regulatory body less frequent changes in top management stricter laws on pilferage and tariff relief

deregulation of esi and privatization of state electric utilities in thailand abstract in thailand electric supply services have all been taken over by the state and operated under state enterprises since 1968 under a law empowering its monopoly state utilities accumulated assets and built up their manpower to expand and operate the power system to serve the whole country during the time of high growth in power demand in early the1990 s the government initiated a move to privatize state electric utilities the pace of which was firmed up after 1997 the year of the financial crash engagement of independent power producers ipps through the use of long term power purchase agreements ppas for supply of electric power into the system operated by state electric utilities was also initiated from the mid 1990s total capacity of ipps and small power producers spps that sell excess power from cogeneration on to the system rose and by the late 1990s started to create a constraint on system economic dispatch in 1999 the national energy policy council nepc approved a recommendation of international consultants to transform the electric supply industry into a structure similar to the system in the united kingdom the transformation was proposed to precede corporatization and privatization of state electric utilities the objectives of deregulation were to revoke the monopoly in esi to improve transparency in electricity pricing to reduce debts of state enterprises and to improve economic efficiency industry participants have voiced strong objection to the industry model proposed with the change of market structure in uk to the new electricity trading arrangement neta the secretariat of nepc also proposed a new structure similar to neta more acceptance from industry participants have been received for the new structure however it has been assumed that the proposed structure would bring improvement in system reliability drawing investment into power generation in a manner that would be efficient tariff has also been expected to become lower because of the competition in power generation and retail trading the authors argue that for developing countries issues of timely investment in new generation and delivery capacity stable and reasonable price of electricity reliability of power supply fuel diversity and security equitable access of supply and promotion of social equity are important maintaining a functioning esi that meet the broad objectives of providing reliable power supply to serve social and economic development needs could be prioritized over introduction of complete competition in wholesale generation and retailing the authors examine the present situation of the industry and propose a transitional model that would serve the broad objectives and introduce gradual competition in the industry the proposed design would unbundle generation from transmission and retailing it would aso eventually promote intra regional interconnection and electricity trading

regulation and competition issues in thai electricity sector abstract this paper explores the issues related to regulatory reform and liberalisation leading toward competition in the thai electricity sector which is still under the monopoly control of state owned enterprises soes following an overview of the current market structure of the thai electricity sector the process of liberalisation and deregulation that contributes to the uncompetitive market structure under soes control is examined the author asserts that there are problems within the energy commission and the energy industry act be 2550 2007 that contribute to the continuance of an uncompetitive electricity supply possible reforms to the thai electricity regulation are proposed with the aim of creating market competition and efficiency in the thai electricity sector

the impact of fx central bank intervention in a noise trading framework abstract in this paper we analyse the effectiveness of the direct central bank interventions using a new effectiveness criterion to this aim we investigate the effects of central bank interventions cbi in a noise trading model with chartists and fundamentalists we first estimate a model in which chartists extrapolate past returns and fundamentalists forecast a mean reverting dynamics of the exchange rate towards a fundamental value then we investigate the role of central bank interventions for explaining the switching properties between the two types of agents we find evidence that in the medium run interventions increase the proportion of fundamentalists and therefore exert some stabilizing influence on the exchange rate

fossil fuel dependence and vulnerability of electricity generation case of selected european countries abstract this paper analyses the diversity of fuel mix for electricity generation in selected european countries and investigates how the fuel bill has changed as a share of gdp between 1995 and 2005 the drivers of fuel dependence related vulnerability are determined using laspeyres index decomposition a what if analysis is carried out to analyse the changes in the vulnerability index due to changes in the drivers and a scenario analysis is finally used to investigate the future vulnerability in the medium term the paper finds that the british and the dutch electricity systems are less diversified compared to three other countries analysed the gas dependence of the dutch and italian systems made them vulnerable but the vulnerability increased in all countries in recent years gas price and the level of dependence on gas for power generation mainly influenced the gas vulnerability the united kingdom saw a substantial decline in its coal vulnerability due to a fall in coal price and coal dependence in electricity generation the scenario analysis indicates that uk is likely to face greater gas vulnerability in the future due to increased gas dependence in electricity generation and higher import dependence

monetary policy surprises and interest rates evidence from the fed funds futures market abstract this paper estimates the impact of monetary policy actions on bill note and bond yields using data from the futures market for federal funds to separate changes in the target funds rate into anticipated and unanticipated components interest rates response to anticipated target rate changes is small while their response to unanticipated changes is large and highly significant these responses are generally consistent with the expectations hypothesis of the term structure surprise target rate changes have little effect on expectations of future actions however which helps to explain the lack of empirical support for the expectations hypothesis at the short end of the yield curve

optimal licensing of technology in the face of asymmetric competition abstract we reconsider the optimal technology licensing by an incumbent firm facing multiple competitors first we cover the case of one license and show that competition has a drastic effect on optimal two part tariffs we also consider license auctions and design a more profitable dynamic mechanism next we allow the licensor to award multiple licenses and design a dynamic mechanism that extracts the maximum industry profit it awards licenses to all firms prescribes maximum permitted royalty rates and positive fixed fees and is more profitable than other dynamic mechanisms finally we show that a slight modification of that mechanism is also optimal for outside patent holders

intraday jumps and us macroeconomic news announcements this paper applies recent non parametric intraday jump detection procedures to investigate the presence and importance of intraday jumps in us futures markets more importantly the paper investigates the extent to which statistically significant intraday jumps are associated with us macroeconomic news announcements jumps are prevalent large and contribute heavily to total daily price variation approximately one third of jumps correspond to us macroeconomic news announcements with pure announcement effects causing large increases in the absolute sizes of jumps and the informational surprise of the announcement explaining large proportions of the jumps the statistical and economic significance of news related jumps is confirmed by results that show higher volatility persistence predictability of lower frequency returns larger effects on microstructure variables jump clustering and co jumps from these jumps versus non news related jumps although there are some interesting variations across asset classes

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

high gas dependence for power generation in thailand the vulnerability analysis abstract thailand uses 74 of its natural gas supply for power generation and 70 of its power comes from gas based technology high dependence on natural gas in power generation raises concerns about security of electricity supply that could affect competitiveness of thai manufacturing and other industries at the global level the effect of fuel dependence on security of electricity supply has received less emphasis in the literature given this gap this research examines the economic impact of high dependence on natural gas for power generation in thailand by analyzing the effect of changes in fuel prices including fuel oil and natural gas on electricity tariff in thailand at the same time the research quantifies the vulnerability of the thai economy due to high gas dependence in power generation our research shows that for every 10 change in natural gas price electricity tariff in thailand would change by 3 5 in addition we found that the gas bill for power generation consumed between 1 94 and 3 05 of gross domestic product gdp between 2000 and 2004 and in terms of gdp share per unit of energy gas dependence in power generation is almost similar to that of crude oil import dependence we also found that the basic metal industry being an electricity intensive industry is the most affected industry additionally we find that volatility of gas price is the main factor behind the vulnerability concern the research accordingly simulates two mitigation options of the problem namely reducing gas dependence and increasing efficiency of gas fired power plants where the results show that these methods can reduce the vulnerability of the country from high gas dependence in power generation

general licensing schemes for a cost reducing innovation optimal combinations of upfront fees and royalties are considered for a cost reducing innovation in a cournot oligopoly for both outside and incumbent innovators it is shown that for any nondrastic innovation a the license is practically sold to all firms ensuring full diffusion of the innovation b consumers are better off firms are worse off and the social welfare is improved c the optimal licensing policy involves positive royalty for relatively significant innovations d compared to an incumbent firm an outsider invests more in r d and has higher incentive to innovate and e as a function of the magnitude of the innovation the industry size that provides the highest incentive to innovate is u shaped

the effect of central bank transparency on exchange rate volatility abstract the increase in central bank transparency has been one of the main developments in central banking in the past two decades this leads to the question of the effect of central bank transparency on the volatility of exchange rates according to theoretical considerations more information could lead to either more precise forecasts or more noise trading this raises the need for an empirical estimation of the relationship the present study shows that the effect of central bank transparency on exchange rate volatility depends on a country s development while there is no effect of central bank transparency in the full sample and for developing countries transparency increases exchange rate fluctuations in developed countries

market based measures of monetary policy expectations a number of recent articles have used different financial market instruments to measure near term expectations of the federal funds rate and the high frequency changes in these instruments around federal open market committee announcements to measure monetary policy shocks this article evaluates the empirical success of a variety of financial market instruments in predicting the future path of monetary policy all of the instruments we consider provide forecasts that are clearly superior to those of standard time series models at all of the horizons considered among financial market instruments we find that federal funds futures dominate all the other securities in forecasting monetary policy at horizons out to six months for longer horizons the predictive power of many of the instruments we consider is very similar in addition we present evidence that monetary policy shocks computed using the current month federal funds futures contract are influenced by changes in the timing of policy actions tha

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

the high frequency response of exchange rates to monetary policy actions and statements abstract this paper investigates the impact of us monetary policy on the level and volatility of exchange rates using an event study with intraday data for five currencies the us dollar exchange rate versus the euro the canadian dollar the british pound the swiss franc and the japanese yen i construct two indicators of news about monetary policy stemming separately from policy decisions and from balance of risk statements estimation results show that both policy decisions and communication have economically large and highly significant effects on the exchange rates with the surprise component of statements accounting for most of the explainable variation in exchange rate returns in response to monetary policy this paper also shows that exchange rates tend to absorb fomc monetary surprises within 30 40 min from the announcement release