Impact of Exports on the Exporter’s Domestic Market

This paper developed a theoretical model of partial equilibrium of the export-oriented market for a short-term period, as well as outlined the main approaches to modeling equilibrium in a long-term period. Thus, the competition between the producers of the selected exporting country and its global competitor in the external import-dependent market is considered. In the partial equilibrium model, for the first time, the domestic and foreign sales markets are presented together. The analysis of the theoretical model made it possible to obtain the following results for the short-term period: in a state close to equilibrium, external supplies of the exporting country are positively related to their own production volumes and negatively – ​with the production volumes of the global exporter; the price of the domestic market of the exporting country is negatively related to the volume of its own production and the volume of production of the global exporter. The paper analyzes three scenarios that allow checking the adequacy of the partial equilibrium model for different conditions of its application. The first scenario considers a negative supply shock associated with a drop in production in a global exporter. The second analyzes the impact of the pandemic on the global exporter and exporting country. The third scenario is devoted to assessing the impact of a demand shock on a designated exporting country. The scenarios confirmed the adequacy of the model. The approach to modeling an export-oriented market for a long-term period is based on the assumption that the exporter's price will converge with the price of the domestic market over time and, ultimately, will differ from it only by the amount of additional costs associated with the export of a unit of production. It was established that, while maintaining exogenous conditions for positive long-term export dynamics, the price of the domestic market of the exporting country will decrease in case of an increase in the incremental values of exports and production volumes of the global exporter. The consequences of the positive dynamics of exports for the domestic demand of the exporting country are considered. The established relationships between exports and sales in the exporter's domestic market were empirically confirmed by the example of the Russian sunflower oil market.

Accessible Modeling of the German Energy Transition: An Open, Compact, and Validated Model

We present an easily accessible model for dispatch and expansion planning of the German multi-modal energy system from today until 2050. The model can be used with low efforts while comparing favorably with historic data and other studies of future developments. More specifically, the model is based on a linear programming partial equilibrium framework and uses a compact set of technologies to ease the comprehension for new modelers. It contains all equations and parameters needed, with the data sources and model assumptions documented in detail. All code and data are openly accessible and usable. The model can reproduce today’s energy mix and its CO2 emissions with deviations below 10%. The generated energy transition path, for an 80% CO2 reduction scenario until 2050, is consistent with leading studies on this topic. Our work thus summarizes the key insights of previous works and can serve as a validated and ready-to-use platform for other modelers to examine additional hypotheses.

A Method to Pre-compile Numerical Integrals When Solving Stochastic Dynamic Problems

We show how the interpolation step of numerical integration can be pre-compiled in partial equilibrium stochastic dynamic problems. We display the pre-compilation’s sufficient conditions and document its speed gains using a consumption-savings model with a discrete labour choice, wage uncertainty and stochastic non-labour income.

Global Liquified Natural Gas Trade under Energy Transition

With the recent rising attention and debates on the role of natural gas, especially liquid natural gas, in energy transition, it is critical to have a consistent approach in assessing uncertainties and dynamics in the global gas market during the next two to three decades. There are two objectives of this paper. The first one is to estimate and discuss the impacts of the global liquified natural gas (LNG) trade under a low-carbon scenario using a partial equilibrium model. The second objective is to discuss the role of a structural economic model in empirical analysis and strategy design under a regime shift, such as an energy transition, for the global natural gas market.

Modelling the Impact of Energy Subsidies Reform in the Republic of Moldova

This article presents the methodology and results of modelling for the analysis on energy affordability and assessing the impact of a possible value added tax increase on the affordability of households to consume adequate levels of natural gas, electricity and heat. The analysis of the reform impact of the subsidy schemes is based on a partial equilibrium model which measures the impact of reforms on energy affordability of different householder groups and budgetary revenue and expenditure, but also on greenhouse gas emissions. Using of targeted social policies generates a budget surplus that can be allocated to energy

Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures

In light of the COVID-19 pandemic, we scrutinize what has been established in the literature on whether entrepreneurship can cause and resolve extreme events, the immediate and long-run impacts of extreme events on entrepreneurship, and whether extreme events can positively impact (some) entrepreneurship and innovation. Based on this, we utilize a partial equilibrium model to provide several conjectures on the impact of COVID-19 on entrepreneurship, and to derive policy recommendations for recovery. We illustrate that while entrepreneurship recovery will benefit from measures such as direct subsidies for start-ups, firms’ revenue losses, and loan liabilities, it will also benefit from aggregate demand-side support and income redistribution measures, as well as from measures that facilitate the innovation-response to the Keynesian supply-shock caused by the pandemic, such as access to online retail and well-functioning global transportation and logistics.