on the international spillovers of us quantitative easing this article analyses the effects of the federal reserve s quantitative easing qe on global portfolio flows differentiating across recipient region of the flows type of flow and qe rounds furthermore the analysis differentiates between the impact of qe expansionary announcements and the actual market operations the analysis shows that qe1 resulted in slight rebalancing towards the us while qe2 and qe3 resulted in rebalancing towards non us assets this suggests that qe increased the pro cyclicality of flows outside the us in particular into emerging market equities the results also suggest a link between us macro financial conditions and the transmission of qe to portfolio flows

renewable energy curtailment a case study on today s and tomorrow s congestion management abstract this work aims at contributing to the development of congestion management in power systems facing a strong expansion of renewable electricity generation we address a comparatively new but increasingly important challenge to electricity markets with a uniform price zone renewable curtailment due to grid constraints our goal is to provide a model framework suitable to investigate the impact of expanding the grid operator s flexibility under varying congestion management regimes we aim to expose the limitations of the current regime and to present a favorable alternative for our analysis we develop an optimal power flow program to replicate the current congestion management regime for distribution grids with high penetration of distributed generation in germany furthermore we introduce district heating as additional flexibility option and investigate the impact under different approaches to congestion management our results suggest that introducing additional flexibility while keeping the current congestion management regime bears significant risk to increase the cost of congestion management adjusting the regime to take into account economic criteria as outlined in this work eliminates this risk and grants direct control on the trade off between curtailment and cost

interorganizational determinants of promotion client leadership and the attainment of women attorneys explanations of gender inequality typically emphasize individual characteristics the structure of internal labor markets or pressures from the institutional environment extending the structuralist and institutional perspectives this article argues that the demographic composition of an organization s exchange partners can influence the demographic composition of the focal organization when the focal organization is dependent upon its partners specifically law firms with women led corporate clients increase the number of partners who are women attorneys data on elite law firms and their publicly traded clients support a bargaining power hypothesis whereby law firms promote women attorneys when their corporate clients have women in three key leadership positions general legal counsel chief executive officer and board director these effects are stronger when the law firm has few clients reinforcing the hypothesis that interorganizational influence is more vital when a focal organization is depe

trade finance specialization and synchronization i investigate the determinants of business cycle synchronization across regions the linkages between trade in goods financial openness specialization and business cycle synchronization are evaluated in the context of a system of simultaneous equations the main results are as follows i specialization patterns have a sizable effect on business cycles most of this effect is independent of trade or financial policy but directly reflects differences in gdp per capita ii a variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized even though they also tend to be more specialized iii the estimated role of trade is closer to that implied by existing models once intra industry trade is held constant the results obtain in a variety of data sets measurement strategies and specifications they relate to a recent strand of international business cycle models with incomplete markets and transport costs and on the empir

the effects of comparable worth in the public sector on public private occupational relative wages if as appears likely comparable worth programs are confined to the public sector the level of publiclprivate relative pay may change and the structure of publiclprivate relative wages within occupations will almost certainly change the nature of these changes will determine the degree to which public wages conform more or less closely to the prevailing wage standard which requires that wages for public jobs be equivalent to wages for similar private sector jobs thus there will be implications for economic efficiency this study analyzes alternative scenarios involving comparable worth in the state and local government slg sector the results suggest that when comparable worth is implemented through special wage increases public sector wages are moved further from compliance with the prevailing wage standard this is because public wages are on average already on a par with privatesector wages however comparable worth tends to provide larger wage increases to those occupations where publiclprivate wages are relatively low and when the payroll budget under comparable worth is fixed at the same size as the payroll budget before comparable worth public wages could be moved closer to compliance with the prevailing wage norm

two price zones for the german electricity market market implications and distributional effects abstract we discuss the implications of two price zones i e one northern and one southern bidding area on the german electricity market in the northern zone continuous increases in capacity with low variable costs cause large regional supply surpluses in the market dispatch while in the southern zone conventional capacity decreases as the spatial imbalance of supply and load is increasing the current single bidding area more often results in technically infeasible market results requiring curative congestion management measures there is an ongoing discussion about the potential effects of introducing bidding zones in germany this paper applies an electricity sector model with network representation to analyze the system implications and the distributional effects of two bidding zones in the german electricity system in 2012 and 2015 results show a modest decrease in cross zonal re dispatch levels particularly in 2015 however overall network congestion and re dispatch levels increase in 2015 and also remain on a high level for two bidding zones results are very sensitive to more than two bidding zones and additional line investments illustrating the challenge to define stable price zones in a dynamic setting with two bidding areas prices in the model results increase in the southern zone and decrease in the northern zone the average price deviation grows from 0 4eur mwh in 2012 to 1 7eur mwh in 2015 with absolute values being significantly higher in hours when price differences occur stakeholders within zones are exposed to the price deviations to a different extent distributional effects are surprisingly small compared to the wholesale price or different network charges

flight home flight abroad and international credit cycles this paper shows that banks exhibit a weaker stronger home bias in the extension of new loans when funding conditions in their home country improve deteriorate we refer to these changes in home bias as flight abroad and flight home effects respectively and show that they are unrelated to the better known flight to quality effect that arises during periods of market turmoil our results also indicate that global banks amplify the effect of homegrown shocks on foreign countries while they are a stabilizing factor for the supply of credit in their home countries

the trend in the male female wage gap in the united states despite the rise in the feminist movement the enactment of equal opportunity legislation and the rapid increase in women s labor force participation a substantial sex differential in wages has persisted in the united states for at least 4 decades measured by hourly earnings of year round workers this wage gap was 31 in 1955 widened to a 35 37 range by the 1960s and early 1970s and then narrowed to 33 by 1982 this paper examines the extent to which changes in the characteristics of men and women in the labor force and other factors can account for the observed pattern the main finding is that increases in women s labor force participation were initially associated with a declining skill level of employed women relative to employed men where skill is measured by years of schooling and job tenure more recently the work experience of employed women has been increasing which helps account for the recent narrowing trend in the wage gap during the 1970s the wage gap probably woul have narrowed m

fixing women s wages the effectiveness of comparable worth policies the author discusses some problems that can prevent comparable worth legislation from achieving meaningful gender wage equity which she defines as the elimination of gender as a factor in wage setting she then tests the comparable worth policies of two canadian provinces against the same set of job content data from a 1988 survey of health care workers whereas manitoba s comparable worth policy she finds would achieve gender wage equity if applied to this set of jobs ontario s would not and would even result in new and capricious instances of inequity she argues that continual scrutiny including comparative analysis of comparable worth policies is needed not only in order to identify the most effective policy designs but also to guard against efforts to undercut legislation through manipulation of implementation procedures

optimal transmission planning under the mexican new electricity market abstract this paper addresses electricity transmission planning under the new industry and institutional structure of the mexican electricity market which has engaged in a deep reform process after decades of a state owned vertically integrated non competitive closed industry under this new structure characterized by a nodal pricing system and an independent system operator iso we analyze welfare optimal network expansion with two modeling strategies in a first model we propose the use of an incentive price cap mechanism to promote the expansion of mexican networks in a second model we study centrally planned grid expansion in mexico by an iso within a power flow model we carry out comparisons of these models which provide us with hints to evaluate the actual transmission planning process proposed by mexican authorities prodesen we obtain that the prodesen plan appears to be a convergent welfare optimal planning process

do trade costs in goods market lead to home bias in equities abstract two of the main puzzles in international economics are the consumption and the portfolio home biases we solve for international equity portfolios in a two country two good stochastic equilibrium model with trade costs in goods markets we show that introducing trade costs as suggested by obstfeld and rogoff obstfeld m rogoff k 2000a the six major puzzles in international macroeconomics is there a common cause nber macroeconomics annual 15 is not sufficient to explain these two puzzles simultaneously on the contrary we find that trade costs create a foreign bias in portfolios for reasonable parameter values this result is robust to the addition of non tradable goods for standard calibrations of the preferences

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

renewable electric energy integration quantifying the value of design of markets for international transmission capacity abstract integrating large quantities of variable renewable electricity generation remains a political and operational challenge one of the main obstacles in europe to installing at least 200 gws of power from variable renewable sources is how to deal with the insufficient network capacity and the congestion that will result from new flow patterns we model the current methodology for controlling congestion at international borders and compare its results under varying penetrations of wind power with models that simulate an integrated european network using nodal localised marginal pricing the nodal pricing simulations illustrate that congestion and price patterns vary considerably between wind scenarios and within countries and that a nodal price regime could make better use of existing network capacity introducing substantial operational cost savings and reducing marginal power prices in the majority of european countries

the structure of disadvantage individual and occupational determinants of the black white wage gap this study is motivated by the idea that the racial gap in earnings is generated not only by individual differences but also by systematic variation in the occupational structure that attenuates or exacerbates the effects of race using data from the 1990 census and the dictionary of occupational titles a hierarchical linear modeling approach is employed that allows the simultaneous exploration of the mechanisms of income inequality operating both within and between occupations among private sector employees striking evidence shows that racial disparities increase in both absolute and percentage terms as one moves up the occupational earnings hierarchy the association between average occupational earnings and within occupation racial disadvantage reveals an overlooked source of racial earnings inequality which constrains the opportunities available to upwardly mobile black men in the private sector this association cannot be explained by measured individual characteristics or by the status demographic composition or skill demands of occupations in the public sector on the other hand racial inequality in earnings is not systematically associated with average occupational earnings and is instead more closely tied to individual human capital and occupational placement the implications of these results are considered and directions for future research are suggested

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

international shock transmission after the lehman brothers collapse evidence from syndicated lending after lehman brothers filed for bankruptcy in september 2008 cross border bank lending contracted sharply to explain the severity and variation in this contraction we analyze detailed data on cross border syndicated lending by 75 banks to 59 countries we find that banks that had to write down sub prime assets refinance large amounts of long term debt and experienced sharp declines in their market to book ratio transmitted these shocks across borders by curtailing their lending abroad while shocked banks differentiated between countries in much the same way as less constrained banks they restricted their lending more to small borrowers

is local bias a cross border phenomenon evidence from individual investors international asset allocation abstract extant literature consistently documents that investors tilt their domestic equity portfolios towards regionally close stocks local bias we hypothesize that individual investors local bias is not limited to the domestic sphere but instead also determines their international investment decisions our results confirm the presence of a cross border local bias specifically we show i that the stockholdings of individual investors living within regional proximity to a foreign country display a significantly lower foreign investment bias towards investment opportunities in that country and ii that this drop in foreign investment bias levels is disproportionately driven by investments in regionally close neighbor country companies the impact of cross border local bias on investors bilateral foreign equity investments is economically significant and holds even after controlling for previously identified explanations of international asset allocation

market splitting in germany new evidence from a three stage numerical model of europe abstract with the sharp increase in redispatch measures seen during recent years the importance of an efficient congestion management has increased particularly in germany as the current market design with a single bidding area ignores the physical constraints of the transmission grid there is an ongoing discussion about introducing price zones against this background we develop a three stage approach to model redispatch and market splitting for germany while considering interactions with interconnected countries we identify an increasing spatial imbalance between generation and load and delays in grid extension as being the main drivers for the increase of modeled redispatch volumes from 2012 to 2020 we show that market splitting reduces imminent congestion although results are sensitive to the zonal delimitation and corresponding net transfer capacities the overall welfare effect is negligible but price differences between the bidding areas investigated i e one northern and southern price zone result in considerable distributional effects while consumers in northern germany would benefit producer rents and in particular the value of wind energy would decrease the opposite is true for southern germany we conclude that market splitting constitutes a solution to reduce redispatch measures as long as transmission grid expansion is further delayed

paying the professor sources of salary variation in academic labor markets using a set of 58 academic fields as distinct labor markets we examined the extent of wage variation within markets the degree to which wages vary is an indicator of market efficiency and of whether a market wage exists holding constant differences in human capital we found that the degree of wage variation in an academic labor market is negatively related to mobility within that market and positively related to the oversupply of labor we also found that as wage variation increases male female wage differentials also increase

the trade creating effects of business and social networks evidence from france using theory grounded estimations of trade flow equations this paper investigates the role that business and social networks play in shaping trade between french regions the bilateral intensity of networks is quantified using the financial structure and location of french firms and bilateral stocks of migrants compared to a situation without networks migrants are shown to double bilateral trade flows while networks of firms multiply trade flows by as much as four in some specifications finally taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three

racial wage inequality job segregation and devaluation across u s labor markets1 despite decades of research showing greater black white inequality in local areas where the black population is relatively large little is known about the mechanisms for this effect using a unique data set of individuals nested within jobs across labor markets this article tests two possible mechanisms for the black concentration effect on wage inequality job segregation and devaluation results show that black population size is associated with greater segregation of black workers into black dominated jobs on the other hand no evidence is found that the penalty for working in a black dominated job the devaluation effect increases as a function of black population size the article concludes that discrimination against workers especially exclusion from better paying jobs is an important mechanism for the effect of black population size on the racial wage gap

endogenous price zones and investment incentives in electricity markets an application of multilevel optimization with graph partitioning in the course of the energy transition load and supply centers are growing apart in electricity markets worldwide rendering regional price signals even more important to provide adequate locational investment incentives this paper focuses on electricity markets that operate under a zonal pricing market design for a fixed number of zones we endogenously derive the optimal configuration of price zones and available transfer capacities on a network in order to optimally govern investment and production decisions in the long run in a multilevel mixed integer nonlinear model that contains a graph partitioning problem on the first level we determine welfare maximizing price zones and available transfer capacities for a given electricity market and analyze their impact on market outcomes using a generalized benders decomposition approach developed in grimm et al 2019 and a problem tailored scenario clustering for reducing the input data size we are able to solve the model to global optimality even for large instances we apply the approach to the german electricity market as an example to examine the impact of optimal zoning on key performance indicators such as welfare generation mix and locations or electricity prices it turns out that even for a small number of price zones an optimal configuration of zones induces a welfare level that almost approaches the first best

market failures of market coupling and counter trading in europe an illustrative model based discussion the horizontal integration of the energy market and the organization of transmission services remain two open issues in the restructured european electricity sector the coupling of the french belgian and dutch electricity markets the trilateral market in november 2006 was a real success the extension of the system to germany in november 2010 also proceeded smoothly and the intent is to continue with the same market architecture but market coupling is based on a zonal system which has often failed in meshed grids this may cast doubts on what will happen in the future when electricity demand picks up again and wind develops the nodal system has generally been more successful than zonal architectures but its implementation is not currently foreseen in the eu this paper analyzes versions of market coupling that differ by the organization of counter trading while underplayed in current discussions counter trading could become a key element of market coupling as its geographic coverage expands and wind penetrates we simplify matters by assuming away strategic behavior between the energy and counter trading markets and conduct the analysis on a stylized six node example taken from the literature we simulate market coupling for different assumptions of zonal decomposition and coordination of transmission system operators tsos we show that these assumptions matter even in the absence of strategic behavior market coupling can be quite vulnerable to the particular situation on hand countertrading can work well or completely fail and it is not clear beforehand what will prevail our analysis relies on standard economic notions such as social welfare and generalized nash equilibrium but the use of these notions is probably novel the nodal organization is the reference first best scenario different zonal decompositions and degrees of coordination are then studied with respect to this first best solution

gravity in international finance abstract the past decade has witnessed an explosion of papers estimating gravity equations for cross border financial holdings without much of a theoretical foundation in this paper we develop a theory for bilateral asset holdings that takes a gravity form we discuss how to estimate international financial frictions and conduct comparative statics analysis within the context of the theory we also find though that reasonable extensions of the model no longer generate a gravity form while this does not significantly complicate estimation and comparative statics analysis it raises questions about the empirical validity of gravity specifications for cross border financial holdings that need to be addressed in future work

information and capital flows the determinants of transactions in financial assets abstract we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions our results support the hypothesis that informational asymmetries are responsible for the strong negative relationship between asset trade and distance this result is very important for theories of asset trade portfolio adjustments and home bias we strengthen it by investigating the roles of explicit informational variables as well as distance in explaining separately cross border trade in corporate equities corporate bonds and government bonds

home country interest rates and international investment in u s bonds abstract we analyze how interest rates affect cross border portfolio investments data on u s bond holdings by foreign investors from 31 countries for the period 2003 2016 and a large variety in movements in interest rates in these countries provide for a unique way to analyze shifts in investment behavior in response to interest rates we find that low er interest rates now prevailing in many advanced countries lead to greater investment in general into the united states with the effects generally driven by investment in higher yielding corporate bonds rather than in treasury bonds in addition to affecting overall investments lower interest rates at home are associated with a greater weight on corporate bonds consistent with search for yield the results are economically important and robust to controlling for a number of country specific macroeconomic and financial conditions as well as to sample restrictions and choices of interest rate our findings have important policy implications in that they suggest that low interest rates can lead to shifts in the volume and composition of overseas investments

the geography of trade in goods and asset holdings gravity models have been widely used to describe bilateral trade in goods portes and rey portes r rey h 2005 the determinants of cross border equity flows journal of international economics 65 2 269 296 applied this framework to cross border equity flows and found that distance which proxies information asymmetries is a surprisingly very large barrier to cross border asset trade we adopt a different point of view and explore the complementarity between bilateral trade in goods and bilateral asset holdings in a simultaneous gravity equations framework providing different instruments for both endogenous variables we show that a 10 increase in bilateral trade raises bilateral asset holdings by 6 to 7 the reverse causality is also significant albeit smaller controlling for trade the impact of distance on asset holdings is drastically reduced keywords gravity models international finance international trade simultaneous equations

a welfare analysis of electricity transmission planning in germany we analyze the electricity transmission planning process in germany netzentwicklungsplan which separates transmission expansion decisions from generation dispatch we employ an economic modeling approach to analyze two different network planning settings in the first setting there is no trade off between transmission network development and generation dispatch as is currently the case in germany a second setting alternatively allows for such a trade off and thus represents a welfare superior way of transmission network planning applications with the two model variants are carried out for the german electricity system in 2035 the results illustrate overinvestment in transmission capacity and decreased welfare associated with the netzentwicklungsplan

location matters an examination of trading profits the electronic trading system xetra of the german security exchange provides a unique data source on the equity trades of 756 professional traders located in 23 different cities and eight european countries we explore informational asymmetries across the trader population traders located outside germany in non german speaking cities show lower proprietary trading profit their underperformance is not only statistically significant it is also of economically significant magnitude and occurs for the 11 largest german blue chip stocks we also examine whether a trader location in frankfurt as the financial center or local proximity of the trader to the corporate headquarters of the traded stock or affiliation with a large financial institution results in superior trading performance the data provide no evidence for a financial center advantage or of increasing institutional scale economies in proprietary trading however we find evidence for an information advantage due to corporate headquarters proximity for high frequency intraday trading

markets in hierarchies organizational and market influences on gender inequality in a state pay system a pivotal issue in sociological theories of labor markets as well as legal and policy debates on pay equity is the relative importance of market and organizational forces in determining pay differences between jobs held predominantly by men and those held predominantly by women this article develops two models of the market organization relationship an administered efficiency model and a bureaucratic politics model quantitative analyses of individual and job level data in a state government pay system indicate that the administered efficiency model does not adequately explain malefemale earnings differences documentary testimonial and interview data strongly suggest the significance of bureaucratic politics in the pay determination process we conclude that market forces influence wage rates but are heavily mediated by organizational factors unrelated to efficiency considerations in the type of organization studied here

uncertain bidding zone configurations the role of expectations for transmission and generation capacity expansion abstract ongoing policy discussions on the reconfiguration of bidding zones in european electricity markets induce uncertainty about the future market design this paper deals with the question of how this uncertainty affects market participants and their long run investment decisions in generation and transmission capacity generalizing the literature on pro active network expansion planning we propose a stochastic multilevel model which incorporates generation capacity investment network expansion and market operation taking into account uncertainty about the future bidding zone configuration using a stylized two node network we disentangle different effects that uncertainty has on market outcomes if there is a possibility that future bidding zone configurations provide improved regional price signals welfare gains materialize even if the change does not actually take place as a consequence welfare gains of an actual change of the bidding zone configuration are substantially lower due to those anticipatory effects additionally we show substantial distributional effects in terms of both expected gains and risks between producers and consumers and between different generation technologies

not just a formality pay system formalization and sex related earnings effects drawing on neoclassical economic internal labor market and devaluation theories we examine how the sex composition of jobs and the sex of individual workers affect earnings depending upon the formalization of the pay type using personnel data for over 8 000 employees we confirm the existence of a negative relationship between earnings and the proportion female in a job we also find that for less formalized pay types cash incentive bonuses sex composition and individual sex effects are larger than for more formalized pay merit raises and base salary together these findings support devaluation explanations suggest that incentive bonuses may widen the earnings gap between women and men and have implications for the design of pay structures in organizations