Asymmetries and shortages of the network neutrality principle: What could neutrality achieve?

The debate on network neutrality has reached sufficient notoriety to eliminate the need for detailed explanation. A simple definition will suffice: “network neutrality” is understood as the principle by which the owners of broadband networks would not be allowed to establish any type of discrimination or preference over the traffic transmitted through the

"The "New Consensus" View of Monetary Policy: A New Wicksellian Connection?"

One of the greatest achievements of the modern "New Consensus" view in macroeconomics is the assertion of a nonquantity theoretic approach to monetary policy. Leading theorists and practitioners of this view have indeed rejected the quantity theory of money, and defended a return to the old Wicksellian idea of eliminating high levels of inflation by adjusting nominal interest rates to changes in the price level. This paper evaluates these recent developments in the theory and practice of monetary policy in terms of two basic questions: 1) What is the monetary policy instrument controlled by the central bank? and 2) Which macroeconomic variables are affected in the short and long run by monetary policy?

Competition and stability: what's special about banking?

This paper examines the relationship between competition policies and policies to preserve stability in the banking sector. Market structures and the relative importance of the three classical antitrust areas for banking are discussed, showing the predominance of merger review considerations for loan and deposit markets as well as the relevance of cartel considerations for payment systems. A core part of the paper is an analysis of the relative roles of competition and supervisory authorities in the review of bank mergers for the G-7 industrialised countries. A wide variety of approaches emerges, with some countries giving a stronger role to prudential supervisors than to competition authorities and other countries doing it the other way round. In search for explanations for this diversity the theoretical and empirical literature on the competition-stability nexus in banking is surveyed. It turns out that the widely accepted trade-off between competition and stability does not generally hold. JEL Classification: G21, G28, G34, K21, L4antitrust policies, Bank competition, banking supervision, financial stability, mergers & acquisitions

Electricity transmission: an overview of the current debate

Electricity transmission has emerged as critical for successfully liberalising powermarkets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues

Post-Privatization Renegotiation and Disputes in Chile

Over the last decade, Chile has undertaken remarkable reforms and transferred publicly owned utilities to the private sector either by selling the assets or through concession agreements. Because of the reforms the country has been able to attract private participation in the provision of public services like energy, transportation, telecommunications, potable water and sewage. In this paper, the authors analyze a series of post-privatization disputes and renegotiations that have taken place in Chile since the late 1980s in the electricity sector. This sector was chosen because the privatization process was, to a large extent, completed a decade ago, providing enough time to properly evaluate negotiations and disputes. The paper also assesses how lessons learned in the reform of electricity were internalized in the design of the regulatory framework for other concessions.Public Utilities, Electricity, Private Sector, IFM-116, electricity sector, dispute renegotiation, Chile, infrastructure, privatization

Credit channel and investment behaviour in Austria: a micro-econometric approach

Using individual firm data, this study analyzes the credit channel in Austria. The estimation is based on an accelerator specification of investment demand augmented by the liquidity ratio and a firm specific user cost of capital. The results show that there is a credit channel in Austria affecting all firms, while the interest rate channel is significant as long as the liquidity ratio is not included in the regression. Taking into account trade credit or lending relationships increases the significance but not necessarily the size of the interest rate channel. The interest rate channel is not significant for young firms due mainly to the fact that young firms rely more heavily on sales to increase investment. In general it is found that firms can reduce the sensitivity of investment to their liquidity position by building lending relationships with a housebank or using trade credit as a substitute for bank loans JEL Classification: C23, D92, E22, E52, G31, G32credit channel, investment demand, panel data

Electricity transmission: an overview of the current debate

Electricity transmission has emerged as critical for successfully liberalising power markets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues.Electricity, Transmission, Regulation, Prices, Merchant Investment