Decentralized demand-supply matching using community microgrids and consumer demand response: A scenario analysis

Developing countries constantly face the challenge of reliably matching electricity supply to increasing consumer demand. The traditional policy decisions of increasing supply and reducing demand centrally, by building new power plants and/or load shedding, have been insufficient. Locally installed microgrids along with consumer demand response can be suitable decentralized options to augment the centralized grid based systems and plug the demand-supply gap. The objectives of this paper are to: (1) develop a framework to identify the appropriate decentralized energy options for demand supply matching within a community, and, (2) determine which of these options can suitably plug the existing demand-supply gap at varying levels of grid unavailability. A scenario analysis framework is developed to identify and assess the impact of different decentralized energy options at a community level and demonstrated for a typical urban residential community Vijayanagar, Bangalore in India. A combination of LPG based CHP microgrid and proactive demand response by the community is the appropriate option that enables the Vijayanagar community to meet its energy needs 24/7 in a reliable, cost-effective manner. The paper concludes with an enumeration of the barriers and feasible strategies for the implementation of community microgrids in India based on stakeholder inputs. (C) 2014 Elsevier Ltd. All rights reserved.

Fiscal Policy and Economic Stability: Does PIGS stand for Procyclicality In Government Spending?

The Financial Crisis has hit particularly hard countries like Ireland or Spain. Procyclical fiscal policy has contributed to a boom-bust cycle that undermined fiscal positions and deepened current account deficits during the boom. We set up an RBC model of a small open economy, following Mendoza (1991), and introduce the effect of fiscal policy decisions that change over the cycle. We calibrate the model on data for Ireland, and simulate the effect of different spending policies in response to supply shocks. Procyclical fiscal policy distorts intertemporal allocation decisions. Temporary spending boosts in booms spur investment, and hence the need for external finance, and so generates very volatile cycles in investment and the current account. This economic instability is also harmful for the steady state level of output. Our model is able to replicate the relation between the degree of cyclicality of fiscal policy, and the volatility of consumption, investment and the current account observed in OECD countries.

On the Informational Role of Term Structure in the U.S. Monetary Policy Rule

This paper uses a structural approach based on the indirect inference principle to estimate a standard version of the new Keynesian monetary (NKM) model augmented with term structure using both revised and real-time data. The estimation results show that the term spread and policy inertia are both important determinants of the U.S. estimated monetary policy rule whereas the persistence of shocks plays a small but significant role when revised and real-time data of output and inflation are both considered. More importantly, the relative importance of term spread and persistent shocks in the policy rule and the shock transmission mechanism drastically change when it is taken into account that real-time data are not well behaved.

Analysis of the legislative framework in the Brazilian policymaking process

Analisa os aspectos da estrutura política brasileira que contribuem para falhas nos processos decisórios e ineficácia nos resultados finais de políticas de governo, com ênfase nos problemas institucionais do poder legislativo. Aborda os seguintes tópicos: fragmentação do sistema partidário, infidelidade partidária, modelo de federalismo, preenchimento de cargos públicos, larga utilização de medidas provisórias, disfunções do processo legislativo.

The Importance of Stock Market Returns in Estimated Monetary Policy Rules: a Structural Approach

This paper estimates a standard version of the New Keynesian Monetary (NKM) model augmented with financial variables in order to analyze the relative importance of stock market returns and term spread in the estimated U.S. monetary policy rule. The estimation procedure implemented is a classical structural method based on the indirect inference principle. The empirical results show that the Fed seems to respond to the macroeconomic outlook and to the stock market return but does not seem to respond to the term spread. Moreover, policy inertia and persistent policy shocks are also significant features of the estimated policy rule.

Term Structure and the Estimated Monetary Policy Rule in the Eurozone

Published as an article in: Spanish Economic Review, 2008, vol. 10, issue 4, pages 251-277.

The Comovement between Monetary and Fiscal Policy Instruments during the Post-War Period in the U.S.

This paper empirically studies the dynamic relationship between monetary and fiscal policies by analyzing the comovements between the Fed funds rate and the primary deficit/output ratio. Simple economic thinking establishes that a negative correlation between Fed rate and deficit arises whenever the two policy authorities share a common stabilization objective. However, when budget balancing concerns lead to a drastic deficit reduction the Fed may reduce the Fed rate in order to smooth the impact of fiscal policy, which results in a positive correlation between these two policy instruments. The empirical results show (i) a significant negative comovement between Fed rate and deficit and (ii) that deficit and output gap Granger-cause the Fed funds rate during the post-Volcker era, but the opposite is not true.

Policy Coordination in an Oligopolistic Housing Market

This paper analyzes the consequences of the interaction between two different levels of government (regulators) in the development of housing policy when their decisions determine the level of competition in the housing market. The analysis discusses the implications derived from a lack of coordination between a local regulator who controls the supply of land for housing development and a central regulator who decides on housing subsidies. The results suggest that lack of coordination has significant effects on prices and supply of houses, housing developers’ profits, and buyers’ surplus.

R&D Policy in Economies with Endogenous Growth and Non-Renewable Resources

The aim of this paper is to analyze how active R&D policies affect the growth rate of an economy with endogenous growth and non-renewable resources. We know from Scholz and Ziemens (1999) and Groth (2006) that in infinitely lived agents (ILA) economies, any active R&D policy increases the growth rate of the economy. To see if this result also appears in economies with finite lifetime agents, we developed an endogenous growth overlapping generations (OLG) economy à la Diamond which uses non-renewable resources as essential inputs in final good’s production. We show analytically that any R&D policy that reduces the use of natural resources implies a raise in the growth rate of the economy. Numerically we show that in economies with low intertemporal elasticity of substitution (IES), active R&D policies lead the economy to increase the depletion of non-renewable resources. Nevertheless, we find that active R&D policies always imply increases in the endogenous growth rate, in both scenarios. Furthermore, when the IES coefficient is lower (greater) than one, active R&D policies affect the growth rate of the economy in the ILA more (less) than in OLG economies.

Optimal fiscal policy in a multisector model with minimum expenditure requirements

This paper investigates optimal fiscal policy in a static multisector model. A Ramsey type planner chooses tax rates on each good type as well as spending levels on each good type subject to an exogenous total expenditure constraint and requirements that some minimum amount of spending be undertaken in each sector. It is shown that optimal policy does not equally spend in each sector but instead results in one of the minimum expenditure constraints binding.

Second-best tax policy in a growing economy with externalities

This paper investigates the exploitation of environmental resources in a growing economy within a second-best scal policy framework. Agents derive utility from two types of consumption goods one which relies on an environmental input and one which does not as well as from leisure and from environmental amenity values. Property rights for the environmental resource are potentially incomplete. We connect second best policy to essential components of utility by considering the elasticity of substitution among each of the four utility arguments. The results illustrate potentially important relationships between environmental amentity values and leisure. When amenity values are complementary with leisure, for instance when environmental amenities are used for recreation, taxes on extractive goods generally increase over time. On the other hand, optimal taxes on extractive goods generally decrease over time when leisure and environmental amenity values are substitutes. Unders some parameterizations, complex dynamics leading to nonmonotonic time paths for the state variables can emerge.

The Optimality of the Common Fisheries Policy: the Northern Stock of Hake

We evaluate the management of the Northern Stock of Hake during 1986-2001. A stochastic bioeconomic model is calibrated to match the main features of this fishing ground. We show how catches, biomass stock and profits would have been if the optimal Common Fisheries Policy (CFP) consistent with the target biomass implied by the Fischler’s Recovery Plan had been implemented. The main finding are: i) an optimal CFP would have generated profits of more than 667 millions euros, ii) if side-payments are allowed (implemented by ITQ’s, for example) these profits increase 26%.

Should Fiscal Policy be different in a Non-Competitive Framework?

Published as an article in: Journal of Monetary Economics, 2003, vol. 50, issue 6, pages 1311-1331.

Optimal Fiscal Policy with Rationing in the Labor Market

Published as an article in: Topics in Macroeconomics, 2005, vol. 5, issue 1, article 17.

The effect of flexibility in working hours on fertility: A comparative analysis of selected european countries

The main aim of this paper is to measure the extent to which part-time work enhances fertility for married or cohabiting women of fertile age. The study covers eleven European countries. The data used are a pool sample of five waves of the European Community Household Panel. Given that we believe that the decisions concerning fertility and labor market status are taken jointly, we carry out a simultaneous estimation approach. Results suggest that policy makers wishing to implement adequate part-time schedules so as to enhance fertility should look at the part-time schedules available in Belgium, Ireland and The Netherlands, which enhance fertility for women who take advantage of this flexibility measure so as to reconcile family and work.