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on Regulation |
| By: | Devine, Mel; Lynch, Muireann à |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp766&r=reg |
| By: | Jonathan Colmer; David Lagakos; Martin Shu |
| Abstract: | This paper asks whether increasing productivity in the electricity sector can yield larger long-run GDP gains than suggested by electricity's small share of aggregate economic activity. We answer this question using a dynamic model in which electricity is a strong complement to other inputs in production. We parameterize the model using our own new measures of electricity-sector TFP across countries. The model predicts modest long-run GDP gains from improving electricity-sector TFP, contrary to the notion that electricity is a weak link. Parameterizations that make electricity a weak link mostly require the electricity sector to be counterfactually large or unproductive. |
| Keywords: | electricity, economic development, weak link, TFP |
| Date: | 2024–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1970&r=reg |
| By: | Keith Head (UBC - University of British Columbia, CEPR - Center for Economic Policy Research - CEPR); Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'études prospectives et d'informations internationales, CEPR - Center for Economic Policy Research - CEPR) |
| Abstract: | Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the data generating process of Berry et al. (1995), BLP, who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, allowing it to fit BLP-based predictions closely. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing oversimplified substitution patterns. |
| Keywords: | Constant Elasticity of Substitution, Industrial Organization, Oligopoly, Trade, Tariffs, Counterfactual analysis |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04347301&r=reg |
| By: | Kohnert, Dirk |
| Abstract: | Since Russia's war in Ukraine, many European countries have been scrambling to find alternative energy sources. One of the answers was to increase imports of liquefied natural gas (LNG). By bypassing the use of pipelines from the East and by building LNG terminals, the EU opened up a wider variety of potential suppliers. The Europe-Africa Energy and Climate Partnership provides a framework for a win-win alliance. African countries will be key players in the future, including sub-Saharan countries such as Nigeria, Senegal, Mozambique and Angola. According to the REPowerEU plan, hydrogen partnerships in Africa will enable the import of 10 million tons of hydrogen by 2030, replacing about 18 billion cubic meters of imported Russian gas. Algeria, Niger and Nigeria recently agreed to build a 4, 128-kilometer trans-Saharan gas pipeline that would run through the three countries to Europe. Once completed, the pipeline will transport 30 billion cubic meters of gas per year. The African Coalition for Trade and Investment (ACTING) estimates potential sub-Saharan LNG export capacity at 134 million tonnes of LNG (approximately 175 billion m3) by 2030. Sub-Saharan Africa is also expected to become the main producer of green hydrogen by 2050. However, this market remains to be developed and requires significant expansion of renewable production and water availability. However, the EU countries and companies involved would be well advised to take note of the adoption of much stricter EU greenhouse gas reduction targets for 2030 and the publication of the European Commission's methane strategy. That being said, the EU could risk having more than half of Europe's LNG infrastructure idle by 2030, as European LNG capacity in 2030 exceeds total forecast gas demand, including LNG and pipeline gas. Regardless, it should not be forgotten that African countries want and need to develop their domestic gas markets as a priority, and that export potential depends on this domestic development. However, LNG alone is not enough to ensure the resilience of the system in the event of a supply failure. Alternative energy sources and energy conservation remain essential. |
| Keywords: | LNG; Hydrogen economy; e-fuels; LNG terminals; Natural gas; Energy security; Gas storage; Sub-Saharan Africa; EU; REPowerEU; Trans-Saharan gas pipeline; emerging markets; Sonatrach; European Green Deal; African Continental Free Trade Agreement; Eni; TotalEnergies; BP; Nigeria; Angola; Mozambique; Tanzania; Senegal; Cameroon; Equatorial Guinea; Namibia; African Studies; |
| JEL: | E22 E23 F13 F18 F23 F35 F54 L71 L95 N57 N77 O13 Q35 Z13 |
| Date: | 2023–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119402&r=reg |
| By: | Roy Long |
| Abstract: | The Market for Lemons is a classic model of asymmetric information first studied by Nobel Prize economist George Akerlof. It shows that information asymmetry between the seller and buyer may result in market collapse or some sellers leaving the market. "Lemons" in the used car market are cars of poor quality. The information asymmetry present is that the buyer is uncertain of the cars' true quality. I first offer a simple baseline model that illustrates the market collapse, and then examine what happens when regulation, ie. a DMV is introduced to reveal (signal) the true car quality to the buyer. The effect on the market varies based on the assumptions about the regulator. The central focus is on the DMV's signal structure, which can have interesting effects on the market and the information asymmetry. I show that surprisingly, when the DMV actually decreases the quality of their signal in a well constructed way, it can substantially increase their profit. On the other hand, this negatively effects overall welfare. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2312.10896&r=reg |
| By: | Ginés de Rus |
| Abstract: | El sistema concesional español está atravesando la que posiblemente sea su peor crisis. Los problemas vienen de antiguo y responden a una asignación ineficiente de riesgos entre empresas concesionarias y la Administración, que se traduce en la tensión entre los principios de riesgo y ventura del concesionario y de mantenimiento del equilibrio económico-financiero de la concesión. Este reparto ineficiente de riesgos viene potenciado por un diseño institucional inadecuado que ignora la evaluación económica de los proyectos, favorece la utilización electoral de la obra pública, priorizando la construcción y descuidando el mantenimiento de la infraestructura existente, y con un riego regulatorio elevado que desanima la inversión |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdafen:2024-03&r=reg |
| By: | Margaret Kyle (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris sciences et lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique); Sinan Corus; Julia Tanndal |
| Abstract: | One goal of the European Commission's proposed reform to existing regulations is to increase patient access to innovative medicines across the European Union. We describe the economic impact of this policy change. Because of the incentives created by other policies, particularly external reference pricing and parallel trade, these reforms may have an adverse impact on competition in the pharmaceutical sector and reduce the attractiveness of Europe as an incubator for pharmaceutical innovation. Changes to bargaining power are likely to favour large, established firms. These reforms also increase the uncertainty of the length of market exclusivity, potentially undermining innovation incentives. |
| Abstract: | L'un des objectifs de la réforme des réglementations existantes proposée par la Commission européenne est d'améliorer l'accès des patients aux médicaments innovants dans toute l'Union européenne. Nous décrivons l'impact économique de ce changement de politique. En raison des incitations créées par d'autres politiques, en particulier celles relatives aux prix de référence externes et au commerce parallèle, ces réformes peuvent avoir un impact négatif sur la concurrence dans le secteur pharmaceutique et réduire l'attrait de l'Europe en tant qu'incubateur de l'innovation pharmaceutique. L'évolution des rapports de force est susceptible de favoriser les grandes entreprises établies. Ces réformes augmentent également l'incertitude quant à la durée de l'exclusivité commerciale, ce qui pourrait nuire aux incitations à l'innovation. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04351643&r=reg |
| By: | Kasyanova, Ksenia (Касьянова, Ксения) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The Russian wholesale electricity market is divided into two price zones: the European (first) price zone and the Siberian (second) price zone. The pricing mechanisms in the first and second price zones are the same: within each price zone, there is a free competition market between producers, which is provided by a significant transmission capacity of the electrical network. At the same time, the flow between the price zones is insignificant, and the equilibrium prices differ to a large extent, since competitive bidding for electricity and capacity is held separately for each price zone. During the analysis of the spot prices by the price zones a two-level model of stochastic volatility was developed. It was already shown that the dynamics of electricity prices are significantly different in the European and Siberian price zones. The transition to the analysis of reginal prices allows to identify the possible causes of these differences. In particular, one of the analysis tools is the construction of linear regressions of estimates of the coefficients of the stochastic volatility model (calculated for each node/region) on the permanent region’s characteristics (geographical location of the region, shares of TPPs, NPPs and HPPs in the power generation structure, shares TPPs operating on gas and coal, the share of the main sectors of GRP). As a result of evaluating the models for the region-averaged node prices, the differences in average prices, weekly price dynamics, the effect size of holidays, heating degree-days and volumes of industrial production on prices between regions were explained. Analysis of node prices based on regional maps makes it possible to detect weaknesses in the infrastructure of the electric power industry and regions with anomalous dynamics of electricity prices. |
| Keywords: | Electricity prices, spot energy market, Bayesian inference, stochastic volatility |
| Date: | 2022–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w20220290&r=reg |
| By: | Mozgovaya, Oksana (Мозговая, Оксана) (The Russian Presidential Academy of National Economy and Public Administration); Phain, Boris (Файн, Борис) (The Russian Presidential Academy of National Economy and Public Administration); Tyomnaya, Olga (Темная, Ольга) (The Russian Presidential Academy of National Economy and Public Administration); Kuznetsov, Vasily (Кузнецов, Василий) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The aim of this research is valuation the impact of comparative method regulation to the financial results of default electricity suppliers and prepare practical recommendations for improving the methodology of comparative method regulation usage. The research tasks are methodology establishment and estimation of the comparative method regulation effects for default electricity supplier’s financial results, and preparing recommendations for the comparative method optimization. The thematic justification consists in necessity to evaluate the practical results of comparative method implication in different aspects of default electricity supplier’s financial results and further development of the comparative method as part of Russian Energy strategy 2035 and realization of tariff transparency policy. The research methods include factor and data analysis, as well as financial analysis. Information (including financial reports) published by default electricity suppliers in accordance with the information disclosure standards was used as the information base of the research. The scientific novelty of the study is establishment and practical approval of methodology of estimation of the comparative method regulation effects for default electricity supplier’s financial results and prepare recommendations for the comparative method optimization. According to the results of the research the increasement of the big part of default electricity suppliers’ financial stability after transition to the comparative method in activity regulation of default electricity suppliers have been revealed. Prospects for further work on the subject of the study are to develop a methodology for reference regulation in other areas of regulated activity. |
| Keywords: | sales markups, guaranteed (default) electricity supplier, tariff policy, financial results, financial condition, method of analogues comparison, yardstick regulation, electricity retail market |
| JEL: | E64 L94 |
| Date: | 2022–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w20220294&r=reg |
| By: | Sarode, Shruti MS; Segal, Katie MPP; Elkind, Ethan JD |
| Abstract: | California's goal to eliminate internal combustion engine sales by 2035 poses challenges for lower- and moderate-income residents, hindering their access to electric vehicles (EVs). Barriers include limited EV charging stations, exacerbated by lower home ownership and inadequate grid infrastructure in lower-income communities. To address this, UC Berkeley School of Law's Center for Law, Energy & the Environment (CLEE) partnered with the City of Watsonville. Due to its location, demographics, and ambitious policy goals, Watsonville represents a potential model and case study for other cities around the state grappling with how to boost EV charging infrastructure. CLEE conducted stakeholder interviews and a convening in Watsonville in May2023, and developed a set of policy recommendations for both state and local entities to accelerate investment in EV charging infrastructure in Watsonville, which could inform other cities facing similar challenges and seeking to meet state targets and residents’ needs. |
| Keywords: | Law, Electric vehicle charging, electric vehicles, zero emission vehicles, low income groups, underserved communities, policy analysis |
| Date: | 2023–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt6r1147v7&r=reg |
| By: | Noriyuki Doi (Innovation System Research Center, Kwansei Gakuin University) |
| Abstract: | Nowadays, producer goods occupy an important position in a country's industrial structure. It is therefore necessary to discuss the links between competition, competitiveness and public policy in the industries. Then it is noteworthy that in Japan producer goods users often procure through 'trading companies'. The trading companies may have an influence on the efficiency of distribution networks vertical firm relations, and competition at the stages of supply chain. However, there has not been much 'economic analysis' of trading companies or the distribution network in the industries. This paper examines the competition mechanism in the machine tool industry, one of major producer goods in Japan particularly focusing on the distribution system of a trading company, one of the main features of the industry, from the perspective of economics, and then to clarify its relation to competition policy. It also summarizes the theoretical and policy issues that need to be addressed in the examination. |
| Keywords: | producer goods, machine tool, competition, distribution network, competition policy |
| JEL: | L14 L41 L42 L52 L64 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:265&r=reg |
| By: | Carletti, Elena; Leonello, Agnese; Marquez, Robert |
| Abstract: | Bank market power, both in the loan and deposit market, has important implications for credit provision and for financial stability. This article discusses these issues through the lens of a simple theoretical framework. On the asset side, banks choose the quality and quantity of loans. On the liability side, they may be subject to depositor runs whenever they offer demandable contracts. This structure allows us to review the literature on the role of market power for credit provision and stability and also highlight the interactions between the two sides of banks’ balance sheets. Our approach identifies relevant channels that deserve further analysis, especially given the rising importance of bank market power for monetay policy transmission and the the rise of the digital economy. JEL Classification: G01, G21, G28 |
| Keywords: | balance sheet interactions, bank runs, credit provision, digital economy, monetary policy transmission |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242886&r=reg |
| By: | Michal Madr (Department of Economics, Faculty of Business and Economics, Mendel university in Brno, Czech Republic); Radek Naplava (Department of Economics, Faculty of Business and Economics, Mendel university in Brno, Czech Republic) |
| Abstract: | The analysis of retail sales in non-specialised stores was carried out from 2005 to 2021. The market share of the six most important competitors (by ownership structure) was 75% in 2021. There has been a gradual increase in market concentration over the long term. The market structure can be characterised as an asymmetric oligopoly, the most common market structure within the European Union. Regarding the number of significant firms and the degree of concentration, the Czech market has a structure similar to the retail markets in Estonia, Germany, and the UK. Within the European comparison, the Czech retail market reaches a medium level, as evidenced by the fact that there are markets with a lower (Hungary and Poland) and higher degree of concentration (Austria and Slovakia) among the neighbouring countries. According to the Herfindahl-Hirschman Index, this market changed from an unconcentrated to a moderately concentrated market after 2013. There were 15 mergers and acquisitions in the period under review. However, only one (the merger of REWE Group with PLUS - DISCOUNT in 2008) was likely to lead to a significant increase in market share (by 3.5 percentage points to 13%), i.e., an increase in market concentration. The market development was very successful for the two foreign owners, the Schwarz-Gruppe (Kaufland and Lidl) and the REWE Group (Billa and Penny), whose subsidiaries had the highest market share growth. At the same time, these four companies include hypermarkets (Kaufland), supermarkets (Billa) and discount stores (Lidl and Penny). The Schwarz-Gruppe's share increased from 13% to 28%, and REWE's rose from 7% to 15%. Trading margins have been relatively stable since 2005; the average level of these indicators has increased slightly, especially from 2015 to 2021. Gross profits and gross operating margins of the largest companies have increased over time. From a company-by-company perspective, gross margins have (with minor exceptions) ranged from 1-4.5%. Sales and gross profits of the largest companies grew faster than inflation, with gross profit growth outpacing sales growth. The evolution of the market for retail sales in non-specialised stores, showing a change in market shares and the relatively low average gross margins of individual market players and their changes, clearly show this is a competitive market. |
| Keywords: | retail sales, market structure, market concentration, performance of companies, Czechia |
| JEL: | D43 L81 M20 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:93_2024&r=reg |
| By: | Sileo, Antonio; Bonacina, Monica |
| Abstract: | This paper studies the effects of the latest European regulations on carbon emissions on the Italian car market and discusses the possibility of achieving climate neutrality of road transport through the “mere” replacement of cars currently on the road with new zero-emission cars. Since 2016, automakers’ production strategies have changed dramatically, with an increasing number of zero (and low) emission models on car lists. To date, these changes on the supply side have not been matched by similar changes in purchasing habits. In recent years, not only have few zero (and low) emission cars been sold, but also few new cars. Unless epoch-making changes occur, it is completely unrealistic to think that we can achieve climate neutrality by 2050 by leveraging exclusively on the renewal of the fleet. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2024–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:339238&r=reg |