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on Regulation |
| By: | Maria Teresa Costa (Universitat de Barcelona & IEB); Elisa Trujillo-Baute (Universitat de Barcelona & IEB) |
| Abstract: | The feed-in tariff regulation is the wider spread promotion scheme used to encourage the take-up and development of generation from renewable energy sources in the EU, and the costs of resources devoted to this promotion are usually borne by final consumers. Two components of the electricity retail price are expected to be influenced by feed-in tariff regulation: the incentive to those firms producing electricity from renewable energy sources and the wholesale price of electricity. In this study we analyze the effects that feed-in tariff regulation has on electricity retail price for industrial consumers. This analysis is performed by estimating the relative intensity of the effects from the cost of incentives for electricity generation under the feed-in tariff and the electricity wholesale price over the Spanish industrial retail price. Especial attention is devoted to technology-specific considerations, as well as short and long run effects. In general, results show that there is not a strong link between the retail and wholesale market for Spanish industrial consumers. Moreover, taking into account technology-specific characteristics, results indicates that an increase of solar generation leads to a higher increase in the industrial retail price than in the case of a proportional increase of wind generation. This implies that, when evaluating the feed-in tariff regulation impact on the industrial retail price, the cost of incentives effect prevails over the wholesale price effect, and this is stronger for solar than for wind generation. |
| Keywords: | Electricity prices, feed-in-tariff, retail market, wholesale market |
| JEL: | L11 L94 L51 L52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-29&r=reg |
| By: | Elberg, Christina (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | To ensure security of supply in liberalized electricity markets, different types of capacity mechanisms are currently being debated or have recently been implemented in many European countries. The purpose of this study is to analyze the cross-border effects resulting from different choices on capacity mechanisms in neighboring countries. We consider a model with two connected countries that differ in the regulator's choice on capacity mechanism, namely strategic reserves or capacity payments. In both countries, competitive firms invest in generation capacity before selling electricity on the spot market. We characterize market equilibria and find the following main result: While consumers' costs may be the same under both capacity mechanisms in non-connected countries, we show that the different capacity mechanisms in interconnected countries induce redistribution effects. More precisely, we find that consumers' costs are higher in countries in which reserve capacities are procured than in countries in which capacity payments are used to ensure the targeted reliable level of electricity. |
| Keywords: | Electricity Markets; Capacity Mechanisms; Cross-Border Effects |
| JEL: | Q41 |
| Date: | 2014–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2014_011&r=reg |
| By: | Sarah Ben Yahmed (IEP Aix-en-Provence - Sciences Po Aix - Institut d'études politiques d'Aix-en-Provence - Institut d'Études Politiques [IEP] - Aix-en-Provence - Aix Marseille Université - Fondation Nationale des Sciences Politiques [FNSP], GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - École des Hautes Études en Sciences Sociales (EHESS) - CNRS : UMR7316); Sean Dougherty (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, OCDE - Organisation de coopération et de développement économiques - OCDE) |
| Abstract: | This paper examines how import penetration affects firms' productivity growth taking into account the heterogeneity in firms' distance to the efficiency frontier and country differences in product market regulation. |
| Keywords: | Firm productivity growth ; Behind-the-border regulatory barriers ; Product market regulation ; Import competition, international trade |
| Date: | 2014–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:gmonwp:hal-00959389&r=reg |
| By: | Dewenter, Ralf (Helmut Schmidt University, Hamburg); Rösch, Jürgen (Helmut Schmidt University, Hamburg) |
| Abstract: | This paper analyses the incentives of a vertical integrated Internet service provider (ISP) to block competitors from content markets. Using a simple model we find that the ISP does not block competing content providers as long as the contents are differentiated sufficiently. Exclusion only takes place when the competitor offers perfect homogeneous content and the ISP has a local monopoly over its Internet access customers or if network effects are strong. In this case, however, the abuse of market power can at least in Europe be prohibited by competition authorities. That is, according to our model there is no need for a regulation of net neutrality. |
| Keywords: | net neutrality; competition; Internet service providers |
| JEL: | D40 K20 L12 L82 L86 |
| Date: | 2014–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2014_149&r=reg |
| By: | Pegels, Anna; Lütkenhorst, Wilfried |
| Abstract: | In this paper, we address the challenge of Germany’s energy transition (Energiewende) as the centrepiece of the country’s green industrial policy. In addition to contributing to global climate change objectives, the Energiewende is intended to create a leading position for German industry in renewable energy technologies, boost innovative capabilities and create employment opportunities in future growth markets at the least possible cost. The success in reaching these aims, and indeed the future of the entire concept, is hotly debated. The paper aims to provide an up-to-date assessment of what has become a fierce controversy by comparing solar photovoltaic (PV) and wind energy along five policy objectives: 1) competitiveness, 2) innovation, 3) job creation, 4) climate change mitigation, and 5) cost. We find mixed evidence that Germany reaches its green industrial policy aims at reasonable costs. Wind energy seems to perform better against all policy objectives, while the solar PV sector has come under intense pressure from international competition. However, this is only a snapshot of current performance, and the long term and systemic perspective required for the energy sector transformation suggests a need for a balanced mix of a variety of clean energy sources. |
| Keywords: | Green industrial policy; renewable energies; Germany |
| JEL: | O3 O31 O38 Q2 Q42 Q48 Q57 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57827&r=reg |
| By: | Calista Cheung |
| Abstract: | House prices have increased significantly in Canada over the past decade, driving household debt and residential construction activity to historical highs. Although macro-prudential tightening has slowed the pace of household borrowing in the last few years, house prices have continued to trend higher, and affordability remains a major challenge in urban centres. First-time home buyers must therefore spend more of their incomes to purchase a house and are vulnerable to future interest rate hikes. Overbuilding in the condominium sectors of some cities appears to be a source of risk, especially if a major price correction in these segments spills over into other markets. The country benefits from a sound and effective housing finance system, which performed well throughout the global financial crisis thanks to strong regulatory oversight and explicit government backing of the mortgage market. Nonetheless, the dominance of the crown corporation CMHC in the mortgage insurance market concentrates a significant amount of risk in public finances. Improving competitive conditions in the mortgage insurance market could help diversify these risks and reduce taxpayer contingent liabilities, while introducing coverage limits on loan losses would better align private and social interests. There may be a shortage of rental housing in several cities, especially in the range that low-income households can afford. Urban planning policies have resulted in low-density residential development which contributes to relatively high transport-related carbon emissions. Addressing these externalities requires stronger pricing signals for land development, road use, congestion and parking, combined with better integration of public transit planning. To prevent the marginalisation of low-income households, planning policies should support social mix and increase incentives for private-sector development of affordable housing. This Working Paper relates to the 2014 OECD Economic Review of Canada (www.oecd.org/eco/surveys/Canada). |
| Keywords: | housing, financial regulation, household debt, macroprudential regulation, land use, affordability, compact growth, development charge, densification, social housing, housing finance, house prices, financial system risk, mortgage securitisation, mortgage markets, property tax, urban planning, urban sprawl, subprime, rental markets |
| JEL: | E02 E44 E61 G21 G22 G23 G28 H21 H42 H71 R14 R21 R31 R38 R48 R52 R58 |
| Date: | 2014–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1145-en&r=reg |
| By: | Pedro Bento (West Virginia University, College of Business and Economics) |
| Abstract: | I introduce patents into a general equilibrium model of innovation, where innovators choose between creating a new product market and competing in an existing market. Patent holders demand royalties from sequential innovators, but are constrained by the ability of innovators to work around patents. I show patent protection acts as a net tax on sequential innovators, reducing both competition and productivity growth. Calibrated to match moments from U.S. data, the model predicts that eliminating patent protection in the U.S. would generate a 23% increase in steady-state productivity growth as well as an increase in welfare equivalent to that from a 16% increase in annual consumption. I test several implications of the model using both U.S. and cross-country data. Consistent with the model, the data suggests an increase in the strength of patent protection reduces both productivity growth and the average quality of innovations. |
| Keywords: | patent protection, competition, innovation, productivity, regulation, growth |
| JEL: | O1 O4 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:13-13&r=reg |
| By: | Vanessa Le Lesle; Franziska Ohnsorge; Minsuk Kim; Srikant Seshadri |
| Abstract: | There is much speculation regarding a “race for dominance†among financial centers in Asia, arising from the anticipated financial opening up of China. This frame of reference is, to an extent, a predilection that results from a traditional understanding of financial centers as possessing historical, geographic, and scale economy advantages. This paper, however, suggests that there is an alternative prism through which the evolution of financial centers in Asia needs to be viewed. It underscores the importance of “complementarity†rather than “dominance†to better serve regional and global financial stability. We posit that such complementarity is vital, through network analysis of the roles of Hong Kong SAR and Singapore as the current leading financial centers in the region. This analysis suggests that a competition for dominance can result in de-stabilizing levels of interconnectivity that render the global “network†as a whole more susceptible to rapid propagation of shocks. We then examine the regulatory and policy challenges that may be encountered in furthering such complementary coexistence. |
| Keywords: | Offshore financial centers;Hong Kong SAR;Singapore;Asia;Financial sector;Banks;Regional integration;Interconnectedness;Networks, financial institutions and services, government policy and regulation |
| Date: | 2014–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/119&r=reg |
| By: | Falilou Fall; Debra Bloch |
| Abstract: | Demographic developments are unfavourable for the financing of pension schemes in most OECD countries, implying continued growth in pension expenditure in virtually all OECD countries. This paper examines the vulnerability of pension systems, with an emphasis on financial sustainability and adequacy. Policy trade-offs and complementarities are reviewed and flanking policies which could underpin successful pension reforms are examined. Automatic adjustment mechanisms are highlighted, as are the roles of prudential regulation and buffer or reserve funds in the case of shocks. Pension system vulnerability indicators are presented for all OECD countries, and the challenges and vulnerabilities of pensions systems in the BRIICS countries are reviewed. Surmonter les vulnérabilités des systèmes de retraite Les évolutions démographiques sont défavorables au financement des systèmes de retraite dans la plupart des pays de l’OCDE et se traduisent par une hausse des dépenses. Ce document examine la vulnérabilité des systèmes de retraites en se focalisant sur la durabilité financière et le niveau adéquat des pensions. Les complémentarités et les choix de politiques sont analysés ainsi que les politiques d’accompagnement qui pourraient sous-tendre une réussite des réformes des retraites. Les mécanismes d’ajustement automatique sont mis en évidence ainsi que le rôle de la régulation prudentielle, des fonds tampons ou de réserves en cas de chocs. Des indicateurs de vulnérabilité des systèmes de retraite sont présentés pour tous les pays membres de l’OCDE, de même, les défis et vulnérabilités des systèmes de retraite des pays BRIICS sont passés en revue. |
| Keywords: | ageing, pensions, defined-contribution schemes, pension sustainability, defined-benefit schemes, prestations définies, retraites, contributions définies, vieillissement, durabilité |
| JEL: | H55 H75 J32 |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1133-en&r=reg |
| By: | Ojo, Marianne |
| Abstract: | As well as consolidating on the existing literature on fair value accounting, by way of reference to jurisdictional analyses which include a focus on China, Japan, Brazil, and South Africa, this paper not only highlights why there is need for a re-think of the use of fair values as the primary basis for the implementation of IFRS, but also accentuates the links between systemic risk and information asymmetries – hence the justification for greater focus on information channels as well as disclosure and financial reporting requirements. Audits, which serve as vital signalling mechanisms in capital markets, have limited roles in many emerging economies than is the case with industrial nations. In contributing to the extant literature on the topic, this paper also aims to address the vital and crucial question relating to whether certain emerging economies are justified in their reluctance to fully embrace audits – based on cost- benefit considerations, as well as other inadequacies relating to fair value measurements. Furthermore, it will be highlighted that whilst audits may appear to have more limited roles in certain jurisdictions, there appears to be greater willingness to embrace Basel III requirements – and in particular, the Basel III leverage ratios in jurisdictions such as China. Ultimately the paper also aims to investigate whether there are any justifications or rationales for a jurisdiction's willingness and pace to adopt IFRS, Basel III requirements, in relation to the existing role assumed by audits in such jurisdictions. |
| Keywords: | fair value accounting; Finance Theory; information asymmetries; risk; corporate governance; ownership structures; auditor; disclosure; principal; agent; regulation; moral hazard; IFRS; China; Japan; Brazil; South Africa |
| JEL: | D8 E3 G3 G38 K2 |
| Date: | 2014–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57826&r=reg |