clearing and pricing for coordinated gas and electricity day ahead markets considering wind power uncertainty natural gas and electricity systems are becoming increasingly strongly coupled gas fired units gfus are replacing retired coal plants and the power systems are more dependent on the flexibilities provided by gfus the gfus power generation capability relies on the availability of gas resources which is jointly determined by the capacity of gas suppliers and pipeline networks however the gas and electricity markets are operated separately consequently the gfus are forced to represent the entire power system to bid on the gas market they must make forecasts regarding future gas consumption and bear the risk of improper contracts or being unable to meet generation schedules due to occasional insufficient gas supply when facing larger shares of renewable energies and more frequent gas network congestions the current market framework is particularly unreliable and inefficient as well as economically unfriendly to the investors of the gfu assets in this paper we try to develop a framework that can combine the two markets by properly pricing the scarce resources e g gas transmission capacity the joint market can help us to allocate the resources more efficiently while satisfying the demands moreover a more forward looking day ahead market clearing framework is presented by considering the uncertainty brought by renewable energies the formulation and algorithm of the proposed joint market model will be presented as are some case studies

productivity convergence in the european regions 1980 2003 a sectoral and spatial approach this article analyses the evolution of the eu productivity between 1980 and 2003 both across regions and sectors by making use of various techniques cross section nonparametric and spatial approaches it concludes that 1 the regional and sectoral dispersion of productivity is quite high 2 the gains experienced in aggregate productivity are due entirely to the sectors productivity growth effect 3 there is a weak beta convergence process at the aggregate and sectoral levels 4 the accounting decomposition of the aggregate productivity convergence process reveals the sectoral productivity growth effect to be the only responsible factor for regional catching up 5 finally there are clear signs of spatial dependence which when properly addressed increase the speed of convergence at the aggregate level

equilibrium of interdependent gas and electricity markets with marginal price based bilateral energy trading the increasing interdependencies between natural gas systems and power systems create new business opportunities in coupled energy distribution markets this paper studies the marginal price based bilateral energy trading on the equilibrium of coupled natural gas and electricity distribution markets convex relaxation is employed to solve a multiperiod optimal power flow problem which is used to clear the electricity market a successive second order cone programming approach is utilized to solve a multiperiod optimal gas flow problem which is used to clear the gas market in addition the line pack effect in the gas network is considered which can offer storage capacity and provide extra operation flexibility for both networks in both problems locational marginal energy prices are recovered from the lagrangian multipliers associated with nodal balancing equations furthermore a best response decomposition algorithm is developed to identify the equilibrium of the coupled energy markets with bilateral gas and electricity trading which leverages the computational superiority of socps cases studies on two test systems validate the proposed methodology

regional per capita income convergence in austria hofer h and worgotter a 1997 regional per capita income convergence in austria reg studies 31 1 12 the question of whether there is a tendency for regional convergence has become a central topic for economic research this paper examines growth and dispersion of output per capita across nine austrian regions and 84 districts time series analysis of the austrian regions finds no evidence for cointegration between regional output and national output we extend our empirical work by estimating convergence regressions for austrian regions and districts the rate of convergence is about 1 a year and indicates a convergence pattern with a very slow pace if we include dummy variables for type of district we estimate 2 which is a familiar value from other studies hofer h et worgotter a 1997 la convergence des revenus regionaux par tete reg studies 31 1 12 la tendance eventuelle a la convergence regionale est devenue un theme principal de la recherche economique cet article examine la cro

the information technology revolution and the unsecured credit market the information technology it revolution coincided with the transformation of the u s unsecured credit market households borrowing increased rapidly and there was an even faster increase in bankruptcy filings a risk of default model with asymmetric information and costly screening is introduced to study this period when information costs are high the design of contracts under private information prevents some households from borrowing with a risk of default as information costs drop households borrow more and bankruptcy filings increase quantitative exercises suggest that the it revolution may have played an important role in the transformation of the unsecured credit market jel e43 e44 g33

regional welfare disparities the case of the european union the regional welfare distribution in the european union between 1993 and 1998 is examined using several complementary methodologies the results obtained show a reduction in regional welfare disparities over the period analysed it is worth noting in this respect however that regional productivity differences prove to be the main determinant behind observed welfare inequality in the european context moreover there has also been a decline in regional bipolarization over the six year contemplated while the degree of observed intradistributional mobility is relatively low the empirical evidence presented nevertheless reveals the importance of variables such as the national component the spatial location the regional productive structure or the percentage of gdp devoted to investment or to r d expenditure in accounting for the dynamics of the distribution under analysis

consumer bankruptcy a fresh start consumer bankruptcy provides partial insurance against bad luck but by driving up interest rates makes life cycle smoothing more difficult we argue that to assess this trade off one needs a quantitative model of consumer bankruptcy with three key features life cycle component idiosyncratic earnings uncertainty and expense uncertainty exogenous negative shocks to household balance sheets we find that transitory and persistent earnings shocks have very different implications for evaluating bankruptcy rules more persistent shocks make the bankruptcy option more desirable larger transitory shocks have the opposite effect our findings suggest the current us bankruptcy system may be desirable for reasonable parameter values jel d14 d91 k35

the impact of income components on the distribution of family incomes attempts have recently been made to assign inequality contributions to various components of income this paper discusses the issues involved in such assignments and highlights the problems that follow from having a number of possible decomposition rules u s data on the distribution of family incomes are used to examine the relative influence of these income components and to evaluate empirically the performance of different decomposition rules a wide range of inequality contributions can be obtained even when restricted to only naturally derived decomposition rules some of the results are plainly absurd and serve to warn against the indiscriminate use of decomposition formulae without first investigating their properties

the role of structural change in european regional productivity growth o leary e and webber d j the role of structural change in european regional productivity growth regional studies recent literature suggests that inter sectoral structural change has a negligible impact on aggregate productivity growth through the application of dynamic shift share methods this paper presents a re examination of this perspective using data for 181 european regions from 1980 to 2007 results suggest that the effect of the inter sectoral component is far from negligible and is substantially stronger for those regions towards the higher deciles of the distribution moreover its effects appear to be particularly growth enhancing when the region is either high and improving or low and deteriorating these results rehabilitate the importance of structural change for growth and convergence

the evolution of regional productivity disparities in the european union from 1975 to 2002 a combination of shift share and spatial econometrics le gallo j and kamarianakis y the evolution of regional productivity disparities in the european union from 1975 to 2002 a combination of shift share and spatial econometrics regional studies this paper evaluates the relative significance of the key factors that underlie regional productivity disparities in the european union industry mix and structural regional differences shift share decomposition is performed and the outcomes are investigated with exploratory spatial analysis and space time econometric models substantial changes in the spatial patterns of productivity and its determinants can be observed during the study period results indicate a decrease in geographical clustering for productivity and both regional and sectoral factors spatio temporal dependencies are essential for correct model specification as their omission results in an overestimation of the effect of the industry mix le gallo j et kamarianakis y l evolution des ecarts de productivite regionaux dans l union europeenne

the democratization of credit and the rise in consumer bankruptcies financial innovations are a common explanation for the rise in credit card debt and bankruptcies to evaluate this story we develop a simple model that incorporates two key frictions asymmetric information about borrowers risk of default and a fixed cost of developing each contract lenders offer innovations that ameliorate asymmetric information or reduce this fixed cost have large extensive margin effects via the entry of new lending contracts targeted at riskier borrowers this results in more defaults and borrowing and increased dispersion of interest rates using the survey of consumer finances and federal reserve board interest rate data we find evidence supporting these predictions specifically the dispersion of credit card interest rates nearly tripled while the new cardholders of the late 1980s and 1990s had riskier observable characteristics than existing cardholders our calculation suggest these new cardholders accounted for over 25 of the rise in bank credit card debt and delinquencies between 1989 and 1998

revolving credit lines and targeted search abstract i propose a model of revolving credit lines and targeted search to analyze what accounts for the profitability of the u s credit card industry my analyses lead to two main findings first the search friction has minimal impact on the level of profitability of the credit card industry most of the profitability is a result of the lender choosing the terms of contract second improved information about consumers accounts for the fall in profitability since the 1980s consistent with the data lenders respond to more information by increasing credit card limits and lowering markups

continuous locational marginal pricing clmp this paper proposes a solution to eliminate the step change in the curve of location marginal price lmp with respect to load variation the new solution is named continuous locational marginal pricing continuous lmp or clmp because it is a continuous function with respect to load the present lmp methodology leads to a step change when a new constraint either transmission or generation becomes binding as load increases similarly there is also a step change of lmp if an existing constraint is no longer binding when load decreases the proposed clmp methodology smooths the step changes in the price curve and introduces a fourth component future limit risk flr price in addition to the present three lmp components energy price congestion price and loss price also flr is an indication of how close the present system state moves to the next constraint an algorithm is proposed in this paper to give a technically efficient method to calculate clmp and flr price two case studies are presented to demonstrate the proposed clmp methodology

debt contracts and financial intermediation with costly screening we develop a credit market model with adverse selection where risk neutral bor rowers self select because lenders make use of a costly screening technology equilibrium contracts are debt contracts and this is robust to randomization in contrast to results for the costly state verification model this framework permits optimal financial intermediary structures in that there is delegated screening in equilibrium if many borrowers are required to fund individual investment projects contrats de dette et internendiation financiere quand le tamisage est couteux les auteurs developpent un modele de marche du credit avec selection adverse otu les emprunteurs qui sont neutres par rapport au risque se selectionnent eux memes parce que les pr6teurs utilisent une technologie de tamisage qui est cohteuse les contrats d equilibre sont des contrats de dette et ces resultats s averent robustes meme quand on utilise des processus au hasard contrairement a ce qui se passe dans le cas du modele cooteux de verification par l etat ce cadre d analyse suggere des structures d intermediation financiere optimales en ce que en equilibre il y a delegation du tamisage si plusieurs emprunteurs sont necessaires pour

does income polarization affect economic growth the case of the european regions ezcurra r does income polarization affect economic growth the case of the european regions regional studies this paper examines the relationship between income polarization and economic growth in the regions of the european union over the period 1993 2003 the results indicate that the level of income polarization is negatively associated with regional growth this finding is in fact robust to various alternative specifications including a number of additional explanatory variables such as initial per capita gross domestic product industry mix human capital stock population density or market potential furthermore it should be noted that the observed negative correlation between polarization and economic performance does not depend on the number of groups used to analyse the degree of income stratification within the sample regions ezcurra r la polarisation des revenus affecte t elle la croissance economique le cas des regions europeennes regional studies cet article etudie les relations en

regional inequality in the european union does industry mix matter ezcurra r gil c pascual p and rapun m 2005 regional inequality in the european union does industry mix matter regional studies 39 679 697 the aim of this paper is to test for the respective roles of regional and sectoral factors in productivity convergence in the european union between 1977 and 1999 the methodology used for this is a new one that combines an alternative version of shift share analysis with various results quoted in the literature on personal income distribution the empirical evidence suggests that regional disparity in productivity in the european union is closely related to intrinsic differences between regions whatever the case the results that emerge also reveal the fundamental role of the country effect in accounting for regional disparities in income per worker in europe in addition our empirical results support the relevance of one sector growth models to explicate per capita income disparities in the european regions

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part i an exact bilevel programming approach the first of this two paper series addresses a practical day ahead auction model where generation revenue constraints are explicitly incorporated in the problem formulation as routinely done in several national electricity markets across europe the revenue constrained market clearing procedure includes the effect of the transmission network inter temporal constraints associated with generation scheduling demand side bidding and marginal pricing this auction design is an instance of price based market clearing which features two major complicating factors first locational marginal prices become decision variables of the optimization process in addition producer revenues are formulated as bilinear and highly nonconvex products of power outputs and market clearing prices the resulting problem is formulated as a mixed integer nonlinear bilevel program with bilinear terms for which available solution techniques rely on heuristics approximations or modeling simplifications this paper presents a novel and exact methodology whereby the original problem is recast as an equivalent single level mixed integer linear program as a consequence finite convergence to optimality is guaranteed and the use of standard commercial software is allowed the proposed transformation is based on duality theory of linear programming karush kuhn tucker optimality conditions and integer algebra results in the second part of this two paper series numerical results from several case studies illustrate the effective performance of the proposed solution approach

the impact of consumer credit access on unemployment unemployed households access to unsecured revolving credit more than tripled over the last three decades this article analyses how both cyclical fluctuations and trend increases in credit access impact the business cycle the main quantitative result is that credit expansions and contractions have contributed to moderately deeper and more protracted recessions over the last 40 years as more individuals obtained credit from 1977 to 2010 cyclical credit fluctuations affected a larger share of the population and became more important determinants of employment dynamics even though business cycles are more volatile newborns strictly prefer to live in the economy with growing but fluctuating access to credit markets

electricity and natural gas interdependency comparison of two methodologies for coupling large market models within the european regulatory framework power generation growth based on natural gas fired power plants ngfpps has lead to increasing interactions between electric power and natural gas industries more companies are progressively and simultaneously participating as big players in both markets however each company has traditionally been settled in one side holding a particular competitive advantage electric power generation companies mainly know how to operate their generation assets whereas gas companies mainly know how to manage their gas supply contracts and make use of often regulated gas assets multi product energy companies have even created independent departments which decisions are usually taken uncoordinatedly in any case companies or departments usually support their decision making process in mathematical tools which represent each market with detail this paper presents two methodologies for coupling two interdependent electricity and gas market models formulated as optimization problems each methodology fulfills different department wishes the electricity perspective methodology maximizes electricity market profits after calculating equivalent gas contracts with the gas market model in contrast the gas perspective methodology minimizes gas operation costs after obtaining the relationship between the marginal revenue and the gas consumption with the electricity market model this coordinated solution would allow companies to obtain synergies resulting in a competitive advantage over other companies that operate uncoordinatedly in both markets

equilibria in an oligopolistic electricity pool with stepwise offer curves we study the equilibria reached by strategic producers in a pool based network constrained electricity market the behavior of each producer is modeled by a mathematical program with equilibrium constraints mpec whose objective is maximizing profit and whose complementarity constraints describe market clearing the joint solution of all these mpecs constitutes an equilibrium problem with equilibrium constraints epec the equilibria associated with the epec are analyzed by solving the strong stationarity conditions of all mpecs which can be linearized without approximation by mixed integer linear programming milp techniques the resulting mixed integer linear conditions can be reformulated as an optimization problem that allows establishing diverse objectives to differentiate among alternative equilibria

strategic offering and equilibrium in coupled gas and electricity markets the wide integration of gas fired units and implementation of power to gas technologies bring increasing interdependence among the natural gas and electricity infrastructures this paper studies the equilibrium of the coupled gas and electricity markets which is driven by the strategic offering behaviors each producer endeavours to maximize its own profit by taking the market clearing process into consideration the market equilibrium can be obtained from an equilibrium problem with equilibrium constraints a special diagonalization algorithm is devised in which the unilateral equilibrium of the gas or electricity market is found in the inner loop given the rivals strategies the interactions of the two markets are tackled in the outer loop case studies on two test systems validate the proposed methodology

consumption and risk sharing over the life cycle a striking feature of u s data on income and consumption is that inequality increases with age this paper asks if individual specific earnings risk can provide a coherent explanation we find that it can we construct an overlapping generations general equilibrium model in which households face uninsurable earnings shocks over the course of their lifetimes earnings inequality is exogenous and is calibrated to match data from the u s panel study on income dynamics consumption inequality is endogenous and matches well data from the u s consumer expenditure survey the total risk households face is decomposed into that realized before entering the labor market and that realized throughout the working years in welfare terms the latter is found to be more important than the former

testing for convergence of the eu regional economies i introduction variations in the economic performance of different regions of the european union have become a matter of increasing concern for policymakers in recent years 1 this paper is however less concerned with the details of the european union s regional policy than with attempting to assess the degree to which economic convergence has occurred across its regions the question of economic convergence has been rather surprisingly a neglected and under researched topic in economics although there has been something of an upsurge of interest following baumol s work on the convergence of oecd economies baumol 1986 the more rigorous analyses of convergence have tended to focus on monetary phenomena and look at the national rather than regional level e g the work of haldane and hall 1991 and hall et al 1992 on nominal exchange rate and inflation convergence in the european union barro and sala i martin s 1991 study of u s and european regions is an exception to this while their paper offers interesting insights into convergence it is forced to rely for its empirical analysis on a number of disparate data sets and to use a number of alternative proxies for variables such as industrial composition in different time frames as explanatory variables in contrast we employ a consistent data base to both re examine and update the findings of barro and sala i martin and to extend the analysis to embrace a wider set of variables that are often thought to have an influence on the convergence process in particular the calculations offered by barro and sala i martin relate to a period before the creation of stronger monetary ties between some union members that have changed the long standing nature of national regional policy instruments in particular the quasi fixing of exchange rates reduces the ability of countries to stimulate their national economies and depressed regions by currency depreciations ii approaches to studying economic convergence general methods for examining convergence include using such indicators as changes in the coefficient of variation of the dispersion of regional performance over time sometimes called sigma convergence 2 table i provides coefficients of variation for regional household gdp at level one regional aggregation within the european union for the period 1977 to 1990 and the ratios of top to bottom deciles 3 the changing coefficients provide general guidelines for example relating to the implications for regional income disparities as successive enlargements have brought more peripheral regions into the union commission of the european communities 1988 but offer little beyond this the major difficulty with these types of measures is that they can be subject to outliers hence convergence or nonconvergence may be excessively influenced by an outlying region further it is not possible or at least very difficult to consider any causes of change through time the data set used in this study is cross section data across the level one regions of the european union for 1975 1981 and 1988 this data set differs from that employed in the earlier work by barro and sala i martin 1991 in three main ways first it is a consistent set with all measures of output per head coming from eurostat and based upon gross domestic product gdp per head at market prices in purchasing power parities standard second it is based on official european union level one administrative regions rather than the mixed system of regions employed by barro and sala i martin this means that for the whole sample period we have three cross sections of annual data on fifty one regions across nine countries consisting of the uk eleven regions west germany eleven regions france eight regions the netherlands four regions belgium four regions and denmark luxembourg and ireland each of which is a single region in contrast barro and sala i martin used data on seventy three european community regions but across only seven countries

relative sources of european regional productivity convergence a bootstrap frontier approach enflo k and hjertstrand p relative sources of european regional productivity convergence a bootstrap frontier approach regional studies this paper addresses the issue of western european regional productivity growth and convergence by means of data envelopment analysis dea decomposing labour productivity into efficiency change technical change and capital accumulation the decomposition shows that most regions have fallen behind the production frontier in efficiency and that capital accumulation has had a diverging effect on the labour productivity distribution using bootstrapping methods the paper also accounts for the inherent bias and the stochastic elements in the efficiency estimation it is found that the relative ranking of the efficiency scores remains stable after the bias correction even after controlling for spatially correlated measurement errors and that the dea successfully identifies the regions on the production frontier as significantly more efficient than other regions enfl

how unsecured credit policies influence mortgage and unsecured loan defaults before the global financial crisis the proportion of households defaulting on the mortgage while remaining current on the unsecured loan was almost the same as the proportion of households current on the mortgage but defaulting on the unsecured loan after the crisis the former ratio became higher than the latter by using a heterogeneous agent model with the mortgage and the unsecured loan i examine how the order of defaults changed before and after the crisis i then analyze the impacts of unsecured credit policies on households mortgage and unsecured loan defaults my quantitative exercise shows that both default rates can decrease as the cost for unsecured loan defaults increases

convex hull pricing in electricity markets formulation analysis and implementation challenges recent widespread interest in convex hull pricing has not been accompanied by an equally broad understanding of the method this paper seeks to narrow the gap between enthusiasm and comprehension the connection between convex hull pricing and basic electricity market clearing processes is clearly developed and a new formulation of the pricing problem is presented from this formulation several important consequences of the method are derived and discussed some counterintuitive properties of convex hull pricing are highlighted and demonstrated with simple examples it is hoped that this paper will spur additional research on convex hull pricing so that an informed judgment can be made regarding its costs and benefits