Less of a Puzzle: a new look at the forward forex market

The two-country monetary model is extended to include a consumption externality with habit persistence. The model is simulated using the artificial economy methodology. The 'puzzles' in the forward market are re-examined. The model is able to account for: (a) the low volatility of the forward discount; (b) the higher volatility of expected forward speculative profit; (c) the even higher volatility of the spot return; (d) the persistence in the forward discount; (e) the martingale behavior of spot exchange rates; and (f) the negative covariance between the expected spot return and expected forward speculative profit. It is unable to account for the forward market bias because the volatility of the expected spot return is too large relative to the volatility of the expected forward speculative profit.

Cooperativism, entrepreneurship and economic development: a linking theoretical model

Cooperatives, as a kind of firms, are considered by many scholars as an remarkable alternative for overcoming the economic crisis started in 2008. Besides, there are other scholars which pointed out the important role that these firms play in the regional economic development. Nevertheless, when one examines the economic literature on cooperatives, it is detected that this kind of firms is mainly studied starting from the point of view of their own characteristics and particularities of participation and solidarity. In this sense, following a different analysis framework, this article proposes a theoretical model in order to explain the behavior of cooperatives based on the entrepreneurship theory with the aim of increasing the knowledge about this kind of firms and, more specifically, their contribution to regional economic development.

Transmission loss allocation in a deregulated electrical energy market

This paper presents a new method for transmission loss allocation in a deregulated electrical power market. The proposed method is based on physical flow through transmission lines. The contributions of individual loads to the line flows are used as basis for allocating transmission losses to different loads. With minimum assumptions, that sound to be reasonable and cannot be rejected, a novel loss allocation formula is derived. The assumptions made are: a number of currents sharing a transmission line distribute themselves over the cross section in the same manner; that distribution causes the minimum possible power loss. Application of the proposed method is straightforward. It requires only a solved power flow and any simple algorithm for power flow tracing. Both active and reactive powers are considered in the loss allocation procedure. Results of application show the accuracy of the proposed method compared with the commonly used procedures.