Suchergebnisse

I estimate the level of emissions cost pass-through to hourly wholesale electricity prices in Germany, based on spot market data. I control for contemporaneous shocks to demand and supply by constructing a detailed supply curve for fossil generation, and intersecting it with residual demand for fossil-based electricity for every hour. Determining the marginal generator allows me to use marginal fuel and carbon costs (rather than prices) as explanatory variables in order to identify the level of cost pass-through directly and with a high level of precision. I find that carbon costs are passed through to electricity prices by at least 84 %, with a central range of 98 %–104 % for different load periods. My results suggest that there is no economic reason for free allowance allocation to the electricity sector, and thus validate the updated allocation rules in Phase 3 of the European Union Emissions Trading Scheme.

The rate of cost pass-through exceeds 50% under strategic delegation of decision-making to managers with sales revenue contracts—regardless of the number of firms in the industry and demand curvature. This contrasts sharply with profit-maximization, for which cost pass-through can take on any positive value. The key intuition is that firms under delegation act as if they faced more rivals than they actually do, thus pushing cost pass-through towards 100%. Cost pass-through with market share contracts is similarly bounded below, and this note also generalizes existing results on equilibrium characterization for this case.

Abstract
This paper analyses the world oil price pass-through to Egypt's domestic inflation rate. The paper adopts the augmented Phillips curve framework and further extends it to consider the growing body of empirical evidence, suggesting that oil prices may have asymmetric effects on inflation. Accordingly, the paper examines and compares the symmetric and the asymmetric oil price pass-through to domestic inflation in the short run and the long run. A linear ARDL-ECM and the bounds cointegration tests are applied as well as a nonlinear asymmetric NARDL model and Wald tests for short-run and long-run asymmetries. The sample consists of quarterly data covering the period from 2001 Q3 to 2019 Q2. The results show that, in the short run, the pass-through of world oil prices to the Egyptian domestic inflation rate is symmetric and of small magnitude. However, on the long-run, oil price pass-through to inflation appears to be nonlinear and asymmetric, specifically, declining oil prices lead to a fall in domestic inflation that is more significant than the rise in inflation caused by rising oil prices.

We measure the pass-through of emissions costs to electricity prices. We perform both reduced-form and structural estimations based on optimal bidding in this market. Using rich micro-level data, we estimate the channels affecting pass-through in a flexible manner, with minimal functional form assumptions. Contrary to many studies in the general pass-through literature, we find that emissions costs are almost fully passed through to electricity prices. Since electricity is traded through high-frequency auctions for highly inelastic demand, firms have weak incentives to adjust markups after the cost shock. Furthermore, the costs of price adjustment are small. (JEL D44, L11, L94, L98, Q52, Q54)