Public values and community energy: lessons from the US and UK

This paper examines some of the normative aspects of community energy programmes — defined here as decentralized forms of energy production and distributed energy technologies where production decisions are made as close as possible to sources of consumption. Such projects might also display a degree of separation from the formal political process. The development of a community energy system often generates a great deal of debate about both the degree of public support for such programmes and the values around which programmes ought to be organized. Community energy programmes also raise important issues regarding the energy choice problem, including questions of process, that is, by whom a project is developed and the influence of both community and exogenous actors, as well as certain outcome issues regarding the spatial and social distribution of energy. The case studies, drawn from community energy programmes in both the United States and the United Kingdom, allow for a careful examination of all of these factors, considering in particular the complex interplay and juxtaposition between the ideas of 'public value' and 'public values'.

Effects of spatial resolution in the simulation of daily and subdaily precipitation in the southwestern US

We evaluate the effects of spatial resolution on the ability of a regional climate model to reproduce observed extreme precipitation for a region in the Southwestern United States. A total of 73 National Climate Data Center observational sites spread throughout Arizona and New Mexico are compared with regional climate simulations at the spatial resolutions of 50 km and 10 km for a 31 year period from 1980 to 2010. We analyze mean, 3-hourly and 24-hourly extreme precipitation events using WRF regional model simulations driven by NCEP-2 reanalysis. The mean climatological spatial structure of precipitation in the Southwest is well represented by the 10 km resolution but missing in the coarse (50 km resolution) simulation. However, the fine grid has a larger positive bias in mean summer precipitation than the coarse-resolution grid. The large overestimation in the simulation is in part due to scale-dependent deficiencies in the Kain-Fritsch convective parameterization scheme that generate excessive precipitation and induce a slow eastward propagation of the moist convective summer systems in the high-resolution simulation. Despite this overestimation in the mean, the 10 km simulation captures individual extreme summer precipitation events better than the 50 km simulation. In winter, however, the two simulations appear to perform equally in simulating extremes.

Conditional mean functions of non-linear models of US output

We compare a number of models of post War US output growth in terms of the degree and pattern of non-linearity they impart to the conditional mean, where we condition on either the previous period's growth rate, or the previous two periods' growth rates. The conditional means are estimated non-parametrically using a nearest-neighbour technique on data simulated from the models. In this way, we condense the complex, dynamic, responses that may be present in to graphical displays of the implied conditional mean.

Asymmetric output gap effects in Phillips Curve and mark-up pricing models: evidence for the US and the UK

A number of studies have found an asymmetric response of consumer price index inflation to the output gap in the US in simple Phillips curve models. We consider whether there are similar asymmetries in mark-up pricing models, that is, whether the mark-up over producers' costs also depends upon the sign of the (adjusted) output gap. The robustness of our findings to the price series is assessed, and also whether price-output responses in the UK are asymmetric.

A comparison of tests of non-linear cointegration with an application to the predictability of US interest rates using the term structure

We test whether there are nonlinearities in the response of short- and long-term interest rates to the spread in interest rates, and assess the out-of-sample predictability of interest rates using linear and nonlinear models. We find strong evidence of nonlinearities in the response of interest rates to the spread. Nonlinearities are shown to result in more accurate short-horizon forecasts, especially of the spread.

Forecasting US output growth using leading indicators: an appraisal using MIDAS models

We evaluate the predictive power of leading indicators for output growth at horizons up to 1 year. We use the MIDAS regression approach as this allows us to combine multiple individual leading indicators in a parsimonious way and to directly exploit the information content of the monthly series to predict quarterly output growth. When we use real-time vintage data, the indicators are found to have significant predictive ability, and this is further enhanced by the use of monthly data on the quarter at the time the forecast is made

Forecasting US output growth with non-linear models in the presence of data uncertainty

We consider the impact of data revisions on the forecast performance of a SETAR regime-switching model of U.S. output growth. The impact of data uncertainty in real-time forecasting will affect a model's forecast performance via the effect on the model parameter estimates as well as via the forecast being conditioned on data measured with error. We find that benchmark revisions do affect the performance of the non-linear model of the growth rate, and that the performance relative to a linear comparator deteriorates in real-time compared to a pseudo out-of-sample forecasting exercise.

Forecasting with vector autoregressive models of data vintages: US output growth and inflation

Vintage-based vector autoregressive models of a single macroeconomic variable are shown to be a useful vehicle for obtaining forecasts of different maturities of future and past observations, including estimates of post-revision values. The forecasting performance of models which include information on annual revisions is superior to that of models which only include the first two data releases. However, the empirical results indicate that a model which reflects the seasonal nature of data releases more closely does not offer much improvement over an unrestricted vintage-based model which includes three rounds of annual revisions.

Probability distributions or point predictions? Survey forecasts of US output growth and inflation

We consider whether survey respondents’ probability distributions, reported as histograms, provide reliable and coherent point predictions, when viewed through the lens of a Bayesian learning model. We argue that a role remains for eliciting directly-reported point predictions in surveys of professional forecasters.

US inflation expectations and heterogeneous loss functions, 1968-2010

Recent literature has suggested that macroeconomic forecasters may have asymmetric loss functions, and that there may be heterogeneity across forecasters in the degree to which they weigh under- and over-predictions. Using an individual-level analysis that exploits the Survey of Professional Forecasters respondents’ histogram forecasts, we find little evidence of asymmetric loss for the inflation forecasters

Linear and non-linear transmission of equity return volatility: evidence from the US, Japan and Australia

This paper models the transmission of shocks between the US, Japanese and Australian equity markets. Tests for the existence of linear and non-linear transmission of volatility across the markets are performed using parametric and non-parametric techniques. In particular the size and sign of return innovations are important factors in determining the degree of spillovers in volatility. It is found that a multivariate asymmetric GARCH formulation can explain almost all of the non-linear causality between markets. These results have important implications for the construction of models and forecasts of international equity returns.