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on Economic Design |
| By: | Niedrig, Nicolas (Technische Universität Berlin and BBH Consulting AG, Berlin, Germany); Giehl, Johannes (Department of Economics, Copenhagen Business School); Jahnke, Philipp (BBH Consulting AG, Berlin, Germany); Müller-Kirchenbauer, Joachim (Technische Universität Berlin) |
| Abstract: | Renewable hydrogen is a crucial element of the energy transition towards climate neutrality. A key aspect of the development of a hydrogen economy is a suitable market design. Public and science discuss aspects like generation, consumption sectors, and infrastructure in detail. However, the discussion of the design options for the hydrogen market is insufficient. The current discussion does not cover different possibilities of the final market states. Thus, this paper focuses on options for the future hydrogen market design. <p> The paper presents a two-step approach to identify market designs. First, a literature review and morphological analysis using the electricity and gas market as references provide the basic elements and values of the options. Second, three different infrastructure scenarios for Germany provide the basis for expert interviews to derive suitable market designs. <p> The analysis results in seven elements that are crucial for the future hydrogen market design. The market design should cover the elements marketplace, trading period, price formation, cost components, price orientation, prequalifications, and geographical coverage. The interviews show that over-the-counter trading and, with increasing regional coverage and more participants, stock exchange trading will be part of the market. The implementation of the stock market requires sufficient market liquidity of the seller’s market dominated by potential generation costs. Further aspects of an exchange in combination with prequalifications would be higher transparency and access to information. These aspects could positively influence the development of the hydrogen economy. |
| Keywords: | Renewable hydrogen; Market design; Hydrogen economy; Energy policy; Power-to-gas |
| JEL: | K20 L10 L50 N54 N74 O24 O25 Q21 Q27 Q41 Q42 |
| Date: | 2024–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_004&r=des |
| By: | Frank Xing |
| Abstract: | Large language models (LLMs) have drastically changed the possible ways to design intelligent systems, shifting the focuses from massive data acquisition and new modeling training to human alignment and strategical elicitation of the full potential of existing pre-trained models. This paradigm shift, however, is not fully realized in financial sentiment analysis (FSA), due to the discriminative nature of this task and a lack of prescriptive knowledge of how to leverage generative models in such a context. This study investigates the effectiveness of the new paradigm, i.e., using LLMs without fine-tuning for FSA. Rooted in Minsky's theory of mind and emotions, a design framework with heterogeneous LLM agents is proposed. The framework instantiates specialized agents using prior domain knowledge of the types of FSA errors and reasons on the aggregated agent discussions. Comprehensive evaluation on FSA datasets show that the framework yields better accuracies, especially when the discussions are substantial. This study contributes to the design foundations and paves new avenues for LLMs-based FSA. Implications on business and management are also discussed. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.05799&r=des |
| By: | Alicia Lloro; Ellen A. Merry; Anna Tranfaglia |
| Abstract: | Many surveys have measured people's financial literacy with a standard set of questions covering interest, inflation, and investment diversification. Results from these surveys have consistently shown that women are less likely than men to answer the financial literacy questions correctly – the so-called financial literacy gender gap. |
| Date: | 2024–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2024-01-02&r=des |
| By: | Alessia Camplomi; Harald Fadinger; Chiara Forlati; Sabine Stillger; Ulrich J. Wagner |
| Abstract: | To prevent carbon leakage induced by unilateral carbon pricing, the EU has designed a Carbon Border Adjustment Mechanism (CBAM) that taxes imports based on their carbon content. Since estimating the carbon content of imports is very complex, CBAM will be applied only to a few emissionintensive sectors. We argue that, as a consequence of its limited applicability, CBAM is unlikely to effectively eliminate leakage. We propose a simple alternative route towards leakage prevention with significantly lower information requirements and administrative burden which can be applied to all tradable sectors: the Leakage Border Adjustment Mechanism (LBAM). LBAM offsets the cost disadvantages of domestic producers relative to foreign competitors induced by unilateral carbon pricing by implementing import tariffs and, potentially, export subsidies that hold trade constant at the level before the introduction of carbon pricing. LBAM requires knowledge only about domestic product-specific output-to-emissions elasticities and import demand and export supply elasticities but does not depend upon information on the carbon content of imports. To quantify the welfare and emission effects of LBAM and to compare it to CBAM, we simulate a unilateral carbon-price increase in the EU using a granular structural trade model with 57 countries and 121 sectors. We find that LBAM is very effective in preventing leakage, while the EU CBAM is not. |
| Keywords: | Carbon Border Adjustment, Carbon leakage, Emission trading, Carbon taxation, Trade policy |
| JEL: | F13 F64 Q54 Q56 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_495&r=des |
| By: | Leonardo Baccini; Arianna Bondi; Matteo Fiorini |
| Abstract: | We explore the role of global value chains (GVCs) in the design of preferential trade agreements (PTAs). We propose a theory that focuses on firms involved in backward and forward GVC activities to identify the main actors pushing for deep trade integration. To address the critical issue of endogeneity of trade flows for trade policy, our identification strategy exploits a transportation shock: The sharp increase in the maximum size of container ships, which more than quadrupled between 1995 and 2017. The key variation in our instrument hinges on the fact that only deepwater ports can accommodate these new larger ships. Our strategy is flexible enough to generate excludable instruments for different value-added components of exports, which allows us to disaggregate the causal effect of GVC participation into backward and forward GVC activities. We find that trade through GVCs increases the probability of forming deep PTAs that include provisions regulating both trade-related and non-trade-related policies. We find also evidence that GVC activities affect the flexibility of PTAs. Our results indicate that trade intermediation by producers is the main driver of the design of trade agreements. |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2013_56&r=des |