Topic Markets

Green, Brown, and Now White Certificates: Are Three One Too Many? A Micromodel of Market Interaction

Our paper deals with modeling the effects of introducing a market-based tool for improving end-users' efficiency in an energy market which is already regulated through a cap-and-trade system for green house gas emissions and a quota system meant to improve competitiveness of energy produced using renewable resources. Our results show that the regulation of energy demand achieves its underlying objects ...

Perspectives of the European Natural Gas Markets until 2025

We apply the EMF 23 study design to simulate the effects of the reference case and the scenarios to European natural gas supplies to 2025. We use GASMOD, a strategic severallayer model of European gas supply, consisting of upstream natural gas producers, traders in each consuming European country (or region), and final demand. Our model results suggest rather modest changes in the overall supply situation ...

Market Integration and the Competitive Effects of Mergers

The Cross-Section of Output and Inflation in a Dynamic Stochastic General Equilibrium Model with Sticky Prices

What Drives Housing Prices Down? Evidence from an International Panel

In this study, we suggest an explanation for the alarmingly low growth rates of real housing prices in Canada and Germany in comparison to other OECD countries over 1975-2005. We show that the long-run development of housing markets is determined by real disposable per capita income, real long-term interest rate, population growth, and urbanization. The differential development of real housing prices ...

Buyer Power and Supplier Incentives

This paper analyzes the origins and welfare consequences of buyer power. We show that if suppliers are capacity constrained or have strictly convex costs, there are two different channels through which large buyers can obtain more favorable terms from their suppliers. In particular, we show how the presence of large buyers can then erode the value of suppliers' outside option. Somewhat surprisingly, ...

New Networks, Competition and Regulation

We consider a model with two firms operating their individual networks. Each firm can choose its price as well as its investment to build up its network. Assuming a skewed distribution of consumers, our model leads to an asymmetric market structure with one firm choosing higher investments. While access regulation imposed on the dominant firm leads to lower prices, positive welfare effects are diminished ...

Buyer Power and Supplier Incentives

This paper argues that - in contrast to an often expressed view - the formation of larger and more powerful buyers need not reduce welfare by stifling suppliers' incentives. If contracts are determined in bilateral negotiations, the presence of larger buyers may both increase suppliers' incentives for product improvement and induce suppliers to choose a more efficient technology. The paper also isolates ...

The Eastern Enlargement of the EU - An Initial Assessment: Growing Imports to the New Member States from the Euro Zone

On 1 May 2004 eight former socialist countries - Estonia, Latvia, Lithuania, Poland, the Czech Republic, the Republic of Slovakia, Hungary and Slovenia - joined the European Union. In the accession year the new EU member states have experienced powerful macroeconomic dynamics, and convergence of per capita income within the new EU-25 was progressing. However, it is remarkable that, for the accession ...

International Market Integration for Natural Gas? A Cointegration Analysis of Prices in Europe, North America and Japan

This paper investigates the degree of integration of natural gas markets in Europe, North America and Japan in the time period between the early 1990s and 2004. The relationship between international gas market prices and their relation to the oil price are explored through principal components analysis and Johansen likelihood-based cointegration procedure. Both of them show a high level of natural ...