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on Regulation |
| By: | Ruhnau, Oliver; Stiewe, Clemens; Muessel, Jarusch; Hirth, Lion |
| Abstract: | Europe is in the midst of the most severe energy crisis in a generation, at the core of which is the continuously plummeting supply of Russian natural gas. With alternative supply options being limited, natural gas prices have surged. This paper empirically estimates the response of natural gas demand to the price increase, using data from Germany—the so far largest consumer of Russian natural gas. We identify the crisis response of small and large consumers separately, controlling for temperature, gas-fired power generation, and economic activity. For small consumers, including mostly households, we find a substantial demand reduction of 6% from March onwards—most likely due to political and ethical considerations after the start of Russia’s invasion of Ukraine. For industrial consumers, demand reductions started much earlier in August 2021, when wholesale prices for natural gas started to surge, with an average reduction of 11%. We conclude that voluntary industrial demand response has played a significant role in coping with the energy crisis so far. |
| Keywords: | Energy demand,Demand response,European energy crisis,Natural gas |
| JEL: | Q41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:261082&r= |
| By: | Mattila, Juri; Seppälä, Timo; Bützow, Alexander; Hynönen, Kalle; Puittinen, Mika |
| Abstract: | Abstract In this brief, we analyze the implications of the new European Commission’s data act from the perspective of both industry agreements and the digital green transition. In addition, we ask whether the new regulation of data will contribute to the emergence of data sharing practices and the digital green transition. It is worth noting that the new data regulation in its current form does not consider the specificities of the industry. |
| Keywords: | Data Act, Data, Industrial data, Contacts, Data sharing, Digitalization, Digital green transition |
| JEL: | K1 K12 K2 L89 |
| Date: | 2022–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:111&r= |
| By: | Bonaldo, Cinzia; Fontini, Fulvio; Moretto, Michele |
| Abstract: | Capacity Remuneration Mechanisms (CRM) can be used in power markets to overtake market failures, reaching security of supply. However, investment in capacity is a dynamic process, that depends on the evolution of prices and costs overtime. In our paper we study the capacity remuneration value through a CRM depending on three possible different technologies that participate to the market: a Variable Renewable Energy (VRE) source; a thermal efficient plant (i.e. Combine Cycle Gas Turbine) and a brown plant (i.e. coal). We shall see that these three types of capacities can be framed by means of a common theoretical framework, those level of complexity increases as the uncertainty rises, moving from the simplest scheme (VRE technology) to the most complex one (coal power plant). For these different technological provisions, we consider how to evaluate them focusing on their investment value by adopting a stochastic approach; we first provide a theoretical framework and then sensitivity analysis and calibration results. We show that for all three technology considered the effect of the CRM is to cap the firm revenues and as consequence it decreases their value. |
| Keywords: | Financial Economics, Production Economics, Resource /Energy Economics and Policy |
| Date: | 2022–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:321985&r= |
| By: | OECD |
| Abstract: | The future is digital and enabled by globally interconnected and high-quality broadband networks. However, high-quality networks across the OECD are far from universal and applications across all sectors of the economy, from smart factories and hospitals to automated vehicles, are increasing the overall demand on networks and requiring them to evolve. Furthermore, to ensure everyone can participate in in this digital future, their expansion at affordable prices to un- and under-served areas needs to continue at pace. This report explores how surging demand is shaping future networks and identifies the four main technological trends that are driving this evolution. It then takes a closer look at measuring the quality of communication services delivered through those networks to inform policy making. Finally, it provides an overview of how policies and regulations are adapting to support the upgrade and expansion of high-quality broadband networks across the OECD. |
| Date: | 2022–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:327-en&r= |
| By: | D’Haultfoeuille, Xavier (CREST-ENSAE); Wang, Ao (University of Warwick and CAGE); Février, Philippe (CREST); Wilner, Lionel (CREST) |
| Abstract: | Despite the wide adoption of revenue management in many industries such as airline, railway, and hospitality, there is still scarce empirical evidence on the gains or losses of such strategies compared to uniform pricing or fully flexible strategies. We quantify such gains and losses and identify their underlying sources in the context of French railway transportation. The identification of demand is complicated by censoring and the absence of exogenous price variations. We develop an original identification strategy combining temporal variations in relative prices, consumers’ rationality and weak optimality conditions on the firm’s pricing strategy. Our results suggest similar or better performance of the actual revenue management compared to optimal uniform pricing, but also substantial losses of up to 16.2% compared to the optimal pricing strategy. We also highlight the key role of revenue management in acquiring information when demand is uncertain. |
| Keywords: | Revenue management ; dynamic pricing ; demand estimation ; demand learning ; moment inequalities JEL Codes: C25 ; C61 ; D12 ; R40 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1412&r= |
| By: | Leonardo Massai; Giacomo Como; Fabio Fagnani |
| Abstract: | We study the equilibrium state of an energy market composed of producers who compete to supply energy to different markets and want to maximize their profits. The energy market is modeled by means of a graph that represents a constrained power network where nodes represent the markets and links are the physical lines with a finite capacity connecting them. Producers play a networked Cournot game on such a network together with a centralized authority, called market maker, that facilitates the trade between geographically separate markets via the constrained power network and aims to maximize a certain welfare function. We study existence of uniqueness of the Nash equilibria and prove a connection between capacity bottlenecks in the power network and the emergence of price differences between different markets that are separated by bottlenecked lines. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.08133&r= |
| By: | Makofske, Matthew |
| Abstract: | Mandatory disclosure promotes self-regulation of product quality, but may also provide incentives for firms to manipulate disclosed information. Collection of quality information by inspectors protects against direct manipulation, but firms may attempt to unduly influence inspectors. In Las Vegas, Nevada, food-service health inspections are numerically scored, with health code violations from three categories carrying prescribed demerit amounts. For disclosure however, numeric scores are coarsened into letter grades, which may encourage lobbying of inspectors to under-report violations near threshold scores. Beginning in 2013, the demerit amount prescribed for each good-practices violation was reduced from 1 to 0; while the letter-grade scale and penalties prescribed for major and critical violations (3 and 5 demerits each) remained unchanged. Exploiting this removal of scoring implications from good-practices violations, coupled with the discontinuous punishment severity inherent in letter-grade disclosure, I find that inspectors significantly under-reported good-practices violations prior to 2013—by 31 to 90 percent in some cases—when those violations were likely to affect letter grades. Without careful design, disclosure policies supplementing inspection programs may inadvertently undermine the regulatory efforts they were meant to support. |
| Keywords: | regulatory inspection, mandatory disclosure, restaurant hygiene, manipulation |
| JEL: | D82 I18 K32 L15 |
| Date: | 2022–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113623&r= |
| By: | Baccianti, Claudio; Labhard, Vincent; Lehtimäki, Jonne |
| Abstract: | Digitalisation can be described as a sequence of technology and supply shocks which affect the economy through employment and labour markets, productivity and output, and competition and market structure. This paper focuses on how digitalisation - the process of diffusion of digital technologies - is affected by institutions and governance. It discusses a number of theoretical mechanisms and empirical evidence for different sets of European and other countries. The results indicate that a higher quality of institutions is usually associated with both a greater speed of diffusion and a greater spread of digital technologies. The results also suggest that there are large, policy-relevant differences in the diffusion process depending on the level of development as well as the state of technological change of a country. JEL Classification: E02, O11, O31, O33, O57 |
| Keywords: | adoption, economy, estimates, panel, technology |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222675&r= |
| By: | Jean C. Kouam (Nkafu Policy Institute, Yaoundé, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | The study assesses the non-linear nexus between fixed broadband and economic growth. It focuses on data from 33 African countries for the period 2010 to 2020. The empirical evidence is based on unit root tests, panel smooth transition regression, and the generalized method of moments. The following findings are established: (i) The proportion of the population with access to electricity above and below which the relationship between fixed broadband and economic growth changes in sign is about 60%.(ii) Below this threshold, each 1% increase in fixed broadband subscriptions induces a decline in the economic growth of about 2.58%. Above the threshold, economic growth would increase by 2.43% when fixed broadband subscriptions increased by 1%. Sensitivity analyses and GMM estimation show that these results are robust. Therefore, due to the COVID-19 pandemic, which requires countries to take adequate measures to curb the spread of the pandemic, especially by means of virtual economic activities, any national policy aiming at improving the access of populations to high levels of fixed broadband services should be preceded by the implementation of an electrification program for at least 60% of the total population. Otherwise, providing a good quality internet connection for the benefit of the population would not produce the expected effects on economic growth and would therefore be counterproductive. This study complements the extant literature by providing thresholds at which fixed broadband affects economic growth. |
| Keywords: | Africa, Fixed broadband, Economic growth, Non-linear effects |
| JEL: | E23 F21 F30 L96 O55 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/039&r= |
| By: | Gros, Daniel |
| Abstract: | Europe has set itself the aim of reducing its dependency on Russian gas imports. This paper provides an economic analysis of a tariff on imports of natural gas into the EU which would help achieve this goal. The starting point is Gazprom’s monopoly on exports of gas from Russia and pricing power on the European market. Standard trade theory implies that a tariff on Russian gas imports would be beneficial for Europe even on purely economic grounds because it would lower the demand curve Gazprom faces and induce it to lower prices. The standard linear model used here takes into account the availability of Liquified natural gas (LNG) supplies and confirms the general rule that it pays to levy a tariff on imports from a foreign monopoly. It yields the following numerical results: - Only one half of the tariff would result in higher prices for European consumers and the tariff revenue would be more than sufficient to compensate them for this loss. - The tariff, which maximises Europe’s welfare, would be close to one third of the price at which Europe would stop importing from Russia. This would cut Gazprom’s net revenues by approximately half. - If the tariff is used as a sanctions weapon to reduce revenues for Russia, the tariff should be higher (around 60 %) and would cut Gazprom’s revenues to one fourth of the free trade level. The overall conclusion is thus that an EU import tariff on Russian gas would have a major impact on Russia’s earning from gas exports and would certainly improve the European terms of trade. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:36006&r= |
| By: | Emilie Dargaud; Armel Jacques |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tep:teppwp:wp21-11&r= |
| By: | Xiaoqing Wan; Nichole R. Lighthall |
| Abstract: | Recently enacted regulations aimed to enhance retail investors' understanding about different types of investment accounts. Toward this goal, the Securities and Exchange Commission (SEC) mandated that SEC-registered investment advisors and broker-dealers provide a brief relationship summary (Form CRS) to retail investors. The present study examines the impact of this regulation on investors and considers its market implications. The effects of Form CRS were evaluated based on three outcome variables: perceived helpfulness, comprehension, and decision making. The study also examined whether personal characteristics, such as investment experience, influenced the disclosure's impact on decision making. Results indicated that participants perceived the disclosure as helpful and it significantly enhanced comprehension about the two types of investment accounts. Critically, participants also showed increased preference and choice for broker-dealers after the disclosure. Increased preference for broker-dealers was associated with greater investment experience, greater comprehension gains, and access to more information from a longer disclosure. These findings suggest that Form CRS may promote informed decision making among retail investors while simultaneously increasing the selection of broker-dealer accounts. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.00117&r= |
| By: | Ugochi Emenogu; Brian Peterson |
| Abstract: | Macroprudential policies are often aimed at the traditional banking sector while non-depository financial institutions or shadow banks have limited or no prudential regulations. This paper studies the macroeconomic impact of household-side macroprudential tightening in the presence of unregulated lenders. Our result shows that the presence of unregulated lenders dampens the impact of the policies on house prices and household debt. We also find that leakage to the unregulated sector increases when monetary policy is tightened. |
| Keywords: | Financial institutions; Financial system regulation and policies; Monetary policy transmission |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:22-28&r= |
| By: | Duchoslav, Jan; Nyondo, Christone; Comstock, Andrew R.; Benson, Todd |
| Abstract: | Agriculture holds special significance in Malawi, because most Malawian households depend primarily on this sector for income and food security. Therefore, legislation surrounding the agricultural sector, and the foundation it lays for the sector’s governance, are fundamental to the development prospects of the country. At their best, agricultural laws encourage farmers, traders (both domestic and international), and processors of agricultural commodities to fully engage and further invest in the agricultural sector. At their worst, they undermine confidence to do so. |
| Keywords: | MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; regulations; market regulations; markets; agriculture; legislation; implementation |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:masspn:45&r= |
| By: | Laurence Scialom; Gaëtan Le Quang; Jérôme Deyris |
| Abstract: | Central bank independence (CBI) has often been presented as a superior institutional arrangement demonstrated by economists in the 1980s for achieving a common good in a non-partisan manner. In this article, we argue that this view must be challenged. First, research in the history of economic facts and thought shows that the idea of CBI is not new, and was adopted under peculiar socio-historical conditions, in response to particular interests. Rather than an indisputable progress in economic science, CBI is the foundation for a particular configuration of the monetary regime, perishable like its predecessors. Secondly, we argue that the simplistic case imagined by the CBI theory (the setting of a single interest rate disconnected from political pressures) is long overdue. For nearly two decades, central banks have been increasing their footprint on the economy, embarking on large asset purchase programs and adopting macroprudential policies. This pro-activism forces independent central banks to constantly address new distributional - and therefore political - issues, leading to a growing number of criticisms of their actions with regard to inequality or climate change. This growing gap between theory and practices makes plausible a further shift of the institutional arrangement towards a democratization of monetary policy. |
| Keywords: | central bank independence, monetary policy, macroprudential policy |
| JEL: | E58 G28 N20 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2022-16&r= |
| By: | Perarnaud, Clément; Fanni, Rosanna |
| Abstract: | On 23 February 2022, the European Commission published its long-awaited legislative proposal for a new Data Act. The proposal marks a significant shift in the EU’s approach to the data economy. It aims to challenge the constitution of data monopolies across various sectors, by reshaping existing power structures that favour large data incumbents and moving to solidify data as a non-rival good. Drawing on desk research and a series of interviews conducted with key experts in Brussels, this CEPS Policy Insights paper proposes to unpack this new legislative proposal by exploring its genealogy, the key policy issues at stake, and identifying the main expected political drivers for the negotiations to come. Despite the Commission’s intentions to address market concentration and limit the EU’s over-reliance on foreign companies in data-intensive sectors, Member States and European industry’s cautious approach to the proposal is indicative of greater challenges to come. The Data Act’s broad territorial reach, revolutionary approach to data access, and extensive technical specifications is expected to have broad implications for citizens, companies and public authorities alike, inside and outside the EU. Upcoming negotiations will be shaped primarily by the outcome of fierce battles between large US-based data incumbents and European actors over the control of their data, complex arbitrages at the Member States’ level in prioritising the contradictory interests of dominant national champions and smaller companies in relation to data access, and strong political divides on the opportunity to further the digital sovereignty agenda at EU level. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:35693&r= |