The Impact of Regulation on Pricing Behavior in the Spanish Electricity Market

In this paper we measure the impact of regulatory measures which affected the Spanish electricity wholesale market in the period 2002-2005. Our approach is based on the fact that regulation changes firms' incentives and therefore their market behavior. In the absence of any regulation firms would choose profit- maximizing prices on their residual demands so that the observed gap between optimal and actual prices provides a measure of the effect of regulation. Our results indicate that regulation has decreased wholesale prices considerably, but became less effective at the end of the sample period which explains the change of regulatory regime introduced in 2006.

Unions, Monetary Shocks and the Labour Market Cycle

Published as an article in: Economic Modelling, 2011, vol. 28, issue 3, pages 1140-1149.

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.

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.

Labor Market Assimilation of Recent Immigrants in Spain

Revised: 2006-11.-- Published as an article in: British Journal of Industrial Relations, June 2007, vol. 45, issue 2, pp. 257-284.

Computing abuse related damages in the case of new entry: An illustration for the Directory Enquiry Services market

A number of European countries, among which the UK and Spain, have opened up their Directory Enquiry Services (DQs, or 118AB) market to competition. We analyse the Spanish case, where both local and foreign firms challenged the incumbent as of April 2003. We argue that the incumbent had the ability to abuse its dominant position, and that it was a perfectly rational strategy. In short,the incumbent raised its rivals' costs directly by providing an inferior quality version of the (essential) input, namely the incumbent's subscribers' database. We illustrate how it is possible to quantify the effect of abuse in situation were the entrant has no previous history in the market. To do this, we use the UK experience to construct the relevant counterfactual, that is the "but for abuse" scenario. After controlling for relative prices and advertising intensity, we find that one of the foreign entrants achieved a Spanish market share of only half of what it would have been in the absence of abuse.