Yes, it’s the economy, stupid, but is it demand or supply? CEPS Commentary, 24 January 2014

Paul De Grauwe writes in this new CEPS Commentary that the recent and surprising conversion of François Hollande to supply-side economics completes the victory of the northern European policy-makers who believe that insufficient aggregate demand should be fought exclusively by supply-side measures. In his view, however, it is not the first time in post-war history that economists and policy-makers apply the wrong medicine; or to put it differently, it's akin to some generals who fight a new war by applying the strategies developed for the previous war.

La Région Méditerranéenne en 2020 et son Rôle dans le Réseau Energétjgue Européen, Vol. I: Analyse de la demande d'energie dans les PSEM (Horizons 2000-2010-2020)= The Mediterranean region in 2020 and its Role in the European Energy Network, Vol. I: Analysis of the energy demand in the SEMC (Horizons 2000-2010-2020).

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Supply and Demand Side Limitations Affecting the Structure of Agriculture and the Rural Economy. Factor Markets Working Paper No. 21, February 2012

The paper criticises the neo-classical assumptions of perfect factor markets and of complete information, which constitute central elements in labour market theory. Based on literature review and on economic reports from transition economies, as well as developing countries and more advanced economies, this deliverable focuses on the structural impediments and imperfections which often characterise rural labour markets and which may prevent an efficient allocation of labour. According to empirical studies, transactions costs and rigidities hinder the well-functioning of labour markets and constrain labour adjustments. The paper attempts to classify the various limitations of rural labour markets from both supply and demand side, although the distinction is not always clear-cut as some problems occur on both sides. The identification of these issues is extremely important as it allows us to highlight the inefficiencies and the failures in labour markets and to understand their impact on labour allocation. In this context, market intervention is desirable and the paper provides particular support for rural development policies such as investments in human capital. Lastly, labour institutions can play a key role in promoting the well functioning of labour markets, thus it is fundamental that they are well in place.

The Theoretical Framework and Methodology to Estimate the Farm Labour and Other Factor-Derived Demand and Output Supply Systems. Factor Markets Working Document No. 44, May 2013

This paper provides a conceptual framework for the estimation of the farm labour and other factor-derived demand and output supply systems. In order to analyse the drivers of labour demand in agriculture and account for the impact of policies on those decisions, it is necessary to acknowledge the interaction between the different factor markets. For this purpose, we present a review of the theoretical background to primal and dual representations of production and some empirical literature that has made use of derived demand systems. The main focus of the empirical work is to study the effect of market distortions in one market, through inefficient pricing, on the demand for other inputs. Therefore, own-price and cross-price elasticities of demand become key variables in the analysis. The dual cost function is selected as the most appropriate approach, where input prices are assumed to be exogenous. A commonly employed specification – and one that is particularly convenient due to its flexible form – is the translog cost function. The analysis consists of estimating the system of cost-share equations, in order to obtain the derived demand functions for inputs. Thus, the elasticities of factor substitution can be used to examine the complementarity/substitutability between inputs.

Prospects for Energy Supply and Demand in the Southern Mediterranean: Scenarios for 2010-30. MEDPRO Technical Report No. 22/December 2012

The aim of this technical report is to quantify alternative energy demand and supply scenarios for ten southern and eastern Mediterranean countries up to 2030. The report presents the model-based results of four alternative scenarios that are broadly in line with the MEDPRO scenario specifications on regional integration and cooperation with the EU. The report analyses the main implications of the scenarios in the following areas: • final energy demand by sector (industry, households, services, agriculture and transport); • the evolution of the power generation mix, the development of renewable energy sources and electricity exports to the EU; • primary energy production and the balance of trade for hydrocarbons; • energy-related CO2 emissions; and • power generation costs.

Digital workers by design? An example from the on-demand economy. CEPS Working Document No. 414/October 2015 Monday, 19 October 2015

Recent organisational and technological changes à la Uber have generated a new labour market fringe: a digital class of workers and contractors. In this paper we study the case of CoContest, a crowdsourcing platform for interior design. Our objective is to investigate how profitable this type of work can be, also from a cross-country perspective, and why professionals choose to supply work on such a platform. Given the low returns, one might expect to see a pattern of northern employer/southern contractor. Yet analysis reveals a more nuanced pattern, in which designers supply their work even if they live in Italy, which is a high-income country. For these designers work on CoContest can make sense if they are new to the labour market and face high entry barriers, although crowdsourcing does not offer them profitable employment full time. The case of Serbia, the second-largest supplier of designers, is different, however. As a result of differences in purchasing power, if the market grows experienced Serbian designers can expect to make a living from crowdsourced contracts.

Five things we need to know about the on-demand economy. CEPS Essay No. 21/8 January 2016

The last few years have witnessed the exponential growth of platforms like Uber and Airbnb and the creation of countless other less well-known examples. The expansion of the on-demand economy puts huge pressure on regulators to adapt it to the existing frameworks for labour and taxation. The rapid growth of the sector also divides experts: it is seen by many as threat for working conditions, and by others as an incredible opportunity. The purpose of this essay is to take a balanced perspective on what we know about the on-demand economy and what needs further investigation. More research is needed on the individual cases before one can draw conclusions on how this new sector works. The political economy of the sector is made even more interesting by the fact that the technology is developing faster than the regulation. Yet, our plea to policy-makers is to refrain from legislating too early and to take the time to understand how the supply and the demand of these services behave and their equilibrium.