Market Flexibility Research Articles

Review of Main Projects, Characteristics and Challenges in Flexibility Markets for Services Addressed to Electricity Distribution Network

Review of Main Projects, Characteristics and Challenges in Flexibility Markets for Services Addressed to Electricity Distribution Network

Green state entrepreneurialism: Building the park city in Chengdu, China

This paper uses the perspective of state entrepreneurialism to explore China’s environmental governance. The perspective illustrates how the Chinese state maintains its centrality, combining environmentalism and developmentalism while deploying flexible market development tools. This paper examines the Chengdu park-city model, an exemplar President Xi Jinping endorsed and widely emulated in China. The model combines the development of industrial and ecological spaces. It aims to deliver the central government’s vision for ecological civilisation and the local government’s economic development strategy. The development tools include land consolidation, financial mobilisation and an economic strategy that attempts to introduce ‘urban scenes’ into ecological spaces. This ecologically oriented development approach is more state-centred, contrasting with the neoliberal green growth machine.

Oil prices and developing stock markets: Evidence from East Asia

The COVID-19 pandemic has introduced unprecedented complexity in the relationship between oil prices and stock markets. This work employs a Threshold Auto-Regressive Distributed Lag (ARDL) framework to analyze this relationship, focusing on two distinct periods: pre-mid-June 2020 and post-mid-June 2020, marked by the onset of the second wave of the pandemic. By examining financial variables including stock and bond returns, exchange rates, and WTI crude oil prices, this research identifies significant differences in market dynamics across these periods. The results indicate that the statistical significance and behavior of the WTI index vary, which is particularly evident in China’s stock market. Impulse Response Functions (IRFs) reveal that Region 1 (pre-mid-June 2020) experienced more pronounced market fluctuations in response to shocks, while Region 2 (post-mid-June 2020) demonstrated increased resilience and adaptability. These findings show heightened stock market vulnerability to oil price shocks during periods of economic policy uncertainty. Consequently, policymakers are advised to put forward adaptive approaches to financial regulation and economic policy, emphasizing market flexibility in response to exogenous shocks and tailoring responses to the specific dynamics of each market.

Sistem Ekonomi Pancasila, Keadilan Sosial, dan Neoliberalisme Global

This paper explores the paradigm shifts in global economic policy over the last two decades, mainly focusing on the rise of neoliberalism and its effects on economic disparities. Neoliberal policies, which prioritize market mechanisms as central to economic governance, are critiqued for exacerbating income inequality and diverging from the principles of social justice foundational to Indonesia's constitution and Pancasila ideology. In contrast, the Sistem Ekonomi Pancasila (SEP) offers a framework that emphasizes social justice, equitable wealth distribution, and the welfare of all Indonesians, aligning economic activities with the nation's ideological foundations. The SEP challenges the neoliberal assumption that labor market flexibility is the sole solution to unemployment, instead highlighting the roles of industrial and regional development in addressing structural unemployment. Furthermore, the paper critiques the focus of monetary policy solely on price stability, advocating for a broader approach that integrates macroeconomic stability with social welfare. Incorporating the principles of Pancasila into economic policies is crucial for achieving an equitable economic democracy, where the government balances market interests with its priority for social welfare. The paper concludes with a proposal for the drafting of a Pancasila Economic System Act to institutionalize these principles into Indonesia's economic governance, ensuring that economic policies promote not only growth but also fairness and social justice for all Indonesians.

PURPOSE AND ADVANTAGES OF CHATBOTS

Digital technologies, in particular chatbots, are becoming a key element of interaction between companies (brands) and consumers, performing various functions, replacing a person and imitating his behavior. They find new functional areas related to the current activities of the organization, acquire new competencies that affect the level of market flexibility of the business and its operational efficiency. Chatbots can guide shoppers through transactional steps, saving them cognitive effort and time, and become an asset that differentiates a company or brand from its competitors. The authors believe that the personalized diversification of chatbots across economic sectors and market sectors will increase the level of maturity of companies and brands in the digital environment, aimed at public recognition and universal socialization. Machine learning gives customer service chatbots the ability to detect emotions and also emotionally engage with customers just like human agents do. The development and analysis of intelligent software and hardware, called intelligent agents, are becoming more and more integrated into everyday life. Intelligent agents perform a variety of tasks, from simple to complex operations. Chatbot, which is a typical example of an artificial intelligence system; communicates with users through messaging apps, websites, mobile apps or phone. Chatbots are one of the simplest and most common examples of human-computer interaction (HCI). In chatbot software, the process begins with understanding the offer sent by the user. The sentence submitted by the user is analyzed using natural language processing (NLP) to understand what the user means. Thus, as a result of analyzing the proposal, artificial intelligence makes a decision like a person and transmits to the user the most appropriate answer to the question. Some chatbots powered by machine learning learn more and become smarter as they interact with users. Below are some chatbot software concepts: Chatbots, which are one of the tools that can be preferred to quickly communicate with users, save time. Chatbots, which are becoming increasingly popular today, are coming to the fore in business activities. In this context, the use of chatbots in marketing and customer relations is growing every day. With the help of chatbots, it becomes much easier to reach a large customer base. Keywords: dialog box, artificial intelligence, communications, consumers, chatbots.

The productivity effects of labor market deregulation: evidence from German firms during 2010–2019

Abstract In the early 2000s, the German government introduced the Hartz reforms, which deregulated German labor markets. These reforms were praised internationally as striking a balance between job growth and productivity growth. While macroeconomic research has shown that the reforms have indeed lowered German unemployment, their effects on labor productivity need to be better understood. This paper addresses the impact of temporary agency work (TAW) on German labor productivity during 2010–2019, based on data from a firm-level panel of the German Institute for Employment Research (IAB). It contributes to the rising number of firm-level studies by extending their results in a broader temporal perspective, during which TAW intensities have increased substantially, especially in TAW-using firms. The system generalized method of moment (GMM) estimations based on a firm-level data set with 13,197 observations for the period 2010–2019 show that a robust hump-shaped relationship exists between the extent of TAW and the firms’ labor productivity. We find that the increase in the use of TAWs following the Hartz reforms has, on average, positively contributed to labor productivity growth in German firms. However, the findings also show that if numerical flexibility is increased too much, productivity growth in Germany will suffer. This is particularly the case for several industrial sectors that are important in the German economy. These results are important given recent calls for more labor market flexibility to help firms grow in an increasingly turbulent global economy.

Secondary flexibility market mechanism design and response behavior analysis among multi-microgrids with high proportional BTM-RERs

As the proportion of behind-the-meter (BTM) renewable energy resources (RERs) in the distribution network continues to rise, the precise role of RERs in the flexibility market, whether as “Recipients” or “Providers”, is becoming less distinct. This observation has led us to explore the integration of flexible load resources and RERs into flexibility markets. Such integration facilitates resource sharing among multiple microgrids (MGs). This paper focuses on the potential emergence of a secondary flexibility (SecFlex) market in the power sector among high proportional BTM-RERs microgrids. Within the concept of SecFlex market, this paper outlines a comprehensive process supporting secondary flexibility trading, which includes “SecFlex market organization–trading volume collation–response schedule optimization”. At first, the market mechanism of the SecFlex market is proposed, where players submit an empirical load curve to the market organizer. During the clearing stage, a social welfare equilibrium problem is solved. Subsequently, the equilibrium trading volume is adjusted in the collation stage to account for the distribution network (DN) voltage magnitude balance. Finally, a response schedule strategy is designed to analyze the behaviors of the players. The cvxpy framework is used to solve social welfare and competitive equilibrium in this paper. The results show significant cost reductions for two players, by 77.8% and 24.0% respectively. However, costs for Player 3 have increased substantially, up to 4.6 times the baseline when flexibility is limited. These findings provide theoretical guidance for the development of the SecFlex market.

THE IMPACT MODEL OF INTEREST RATE LIBERALIZATION REFORM ON THE PROFITABILITY OF STATE-OWNED COMMERCIAL BANKS: A CASE STUDY OF BANK C OF CHINA

This paper explores the definition and development of interest rate marketization in China and its impact on the profitability of state-owned commercial banks. The reform, characterized by the People's Bank of China's gradual easing of interest rate controls and expansion of the benchmark interest rate's floating range, enhanced financial market flexibility and efficiency but challenged traditional banking profit models based on interest margins. Through qualitative case studies and thematic analysis of the Bank C (China), the study finds that Bank C effectively mitigated these challenges by optimizing asset-liability management, adjusting asset and liability structures, and employing proactive risk management. These measures improved its investment returns and profitability. Additionally, Bank C’s adoption of countercyclical strategies and advancements in digital transformation and process automation helped sustain its profit model. The research concludes that Bank C's strategic adjustments enhanced its profitability and competitive edge, offering insights for other banks in similar market conditions and aiding predictions of financial market trends.

Labor Market Flexibility and Unemployment: A Study of the United States

Purpose: The aim of the study was to investigate the labor market flexibility and unemployment: a study of the United States
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: The study on Labor Market Flexibility and Unemployment in the United States found that while flexibility can foster job creation, it also exacerbates structural unemployment. Certain groups, like minorities and low-skilled workers, are disproportionately affected. Additionally, technological advancements and globalization reshape the labor market. Labor market institutions play a crucial role in mediating flexibility's impact. Overall, nuanced policy interventions are needed to address unemployment challenges.
 Unique Contribution to Theory, Practice and Policy: Structural unemployment theory, dual labor market theory & institutional theory of labor markets may be used to anchor future studies on the labor market flexibility and unemployment: a study of the United States. Practical recommendations could include fostering a supportive environment for entrepreneurship and innovation, enhancing access to lifelong learning and skill development opportunities, and implementing targeted measures to support vulnerable groups in the labor market. From a policy perspective, the study should advocate for evidence-based policymaking that prioritizes the promotion of inclusive growth and social cohesion.

Impact of financial development on the position in global value chain: An analysis from the perspective of R&D intensity

In this study, we provide a new explanation for the position in global value chain (GVC)—the impact of financial development—and explore the mechanism from the perspective of research and development (R&D) intensity. Based on GVC and financial development theories, we construct a general equilibrium model and find that financial development promotes product quality by increasing a company’s R&D investment intensity, thus affecting the position in global value chain. The theoretical analysis is supported by empirical evidence based on a panel data from 32 countries between 1995 and 2018. Considering that many developing countries are still trapped in the position with low value added in GVC, our findings provide an important solution—launching financial reforms such as developing direct financing, improving financial market flexibility, and enhancing operational efficiency in the market.

Demographic Dividend or Demographic Threat in Pakistan?

Population growth and size have remained the focus of debate for centuries but the recent demographic transition in developing countries has made social scientists take note of the changing age structure of the population as well. As a result of declining population growth and consequent changes in age structure, the proportion of working-age population is increasing in most developing countries. An associated decline in the dependent age population offers a window of opportunity, referred to as the ‘demographic dividend’. Pakistan is also going through the demographic transition, and is experiencing a once-in-a-lifetime demographic dividend as the working-age population bulges and the dependency ratio declines. This paper looks into the demographic dividend being offered to Pakistan and its implications for the country, mainly through three mechanisms: labour supply, savings, and human capital. For economic benefits to materialise, there is a need for policies dealing with education, public health, and those that promote labour market flexibility and provide incentives for investment and savings. On the contrary, if appropriate policies are not formulated, the demographic dividend might, in fact, be a cost, leading to unemployment and an unbearable strain on education, health, and old age security.

Establishing a hierarchical local market structure using multi-cut Benders decomposition

Local electricity markets (LEMs) such as peer-to-peer (P2P) and community-based markets allow prosumers and consumers to exchange electricity products and services locally. In order to coordinate electricity trading and flexibility services, this paper proposes a hierarchical prosumer-centric market framework with a hybrid LEM and a local flexibility market (LFM). Multi-cut Benders decomposition (MCBD) is employed to decompose the integrated hybrid LEM into a centralized P2P market and multiple community-based markets. The aggregators coordinate energy sources and demands of households in low voltage (LV) distribution networks (DN) as virtual power plants (VPPs) and engage in trading through a P2P market over the medium voltage (MV) DN. In addition, a modified MCBD (M-MCBD) approach is proposed to accelerate the convergence process. The LFM is operated by the distribution system operator (DSO) and is formulated as a mixed-integer nonlinear programming (MINLP) problem which is further relaxed to a mixed-integer second-order cone programming (MI-SOCP) problem. The case study demonstrates that aggregators were able to collaborate on trading within the hybrid LEM to minimize the costs incurred by prosumers within the network. Furthermore, the proposed M-MCBD method improves the scalability of the MCBD by enhancing its convergence speed and accuracy, as demonstrated by testing on problems of varying scales.

The Impact of a Common Currency on the European Union

This study examines the ramifications of adopting a common currency within the European Union (EU), focusing on introducing the euro. Initially prompted by optimistic expectations of economic stimulation and balanced budgets, the research critically assesses the economic, trade, and policy dimensions associated with a unified currency. Utilizing Mundell's optimal currency regions concept, the methodology establishes prerequisites for a successful monetary union, emphasizing vulnerability to macroeconomic shocks, labor market flexibility, and intra-regional commerce. Findings reveal that while a common currency eliminates foreign exchange expenses, reduces uncertainty in bilateral exchange rates, and facilitates investments, member states must sacrifice autonomy in monetary and exchange rate policies. The advantages include streamlined cross-border payments, enhanced trade, and improved movement of labor and products, while the drawbacks involve rigid monetary policies and limitations on policy tailoring to specific economic conditions.
 To maximize benefits, the research proposes measures such as deepening economic integration, ensuring macroeconomic stability, and promoting political unity. The study emphasizes the importance of sound economic policies to complement the adoption of a common currency and mitigate potential challenges. In conclusion, the research offers a comprehensive understanding of the advantages and disadvantages associated with a common currency in the EU, providing a roadmap for effective navigation and suggesting interventions to ensure successful implementation.

Neoliberalism and Urban Sphere: Contextualization and Impacts on the Urban Spaces of the Global South

The urban space was the epitome of rationality, functionality, and efficiency in the post-war period which got transformed into market flexibility, horizontal functional integration, and global-level efficiency with processes like outsourcing giving effect to spatial rationality and integration. The principle of marketability has allowed the space for the local governance to rescale, reorganize, and restructure itself. Urban space in the global south has the phenomenon of ‘Accumulation by Dispossession’, but this process created new opportunities for the dispossessed people to participate in the incoming opportunities. In the local context of the Global South Neoliberal policies in the urban space have a differential impact on different sections of the urban populace as they perpetuate the marginality in certain cases, especially socio-economic lower strata, and provide new opportunities for the other well-off sections. The Government adopted a new restructured approach to welfare and the urban governance role has not been insignificant as the impact of neoliberalism would have been more devastating to the marginal section of the urban population especially in the global south if the State and local government had completely abdicated its functions of welfare and completely fall in the line of market principle.

Decision Considerations in Labor Market Flexibility under the Phenomenon of “Valley Circle”

The “Valley Circle” refers to a group of enthusiasts passionate about derivative products related to characters from fiction, animation, and games. This phenomenon has, to some extent, reshaped the consumer market and also impacted the labor market. Under the influence of the “Valley Circle” phenomenon, individual decision-making considerations in the labor market have become more complex. The phenomenon has enhanced labor market flexibility. With the development of internet technology, many professions related to “Valley Circle” have emerged, such as character designers, illustrators, and game developers. These professions often emphasize individual creativity and skills rather than geographical location, offering more opportunities for remote work. This flexibility not only helps individuals better balance work and life but also provides a wider geographical choice when choosing a job. Therefore, in decision-making considerations, individuals should fully assess their interests, skills, and long-term career planning, weighing the pros and cons comprehensively to make the most suitable choice for themselves.

Development of the Reed Industry Group Through Training in Financial Management, Management and Sustainable Architectural Building Design

Industry plays a vital role in reducing poverty in developing countries. In Bali, the creative industry has developed rapidly, although initially, it was still small. The alang-alang roofing industry, which focuses on producing and using roofing from alang-alang leaves, is a significant sector in the construction and property development industry. This material is used in traditional buildings and modern, environmentally friendly building designs. A case study of the "Tegal Wangi" thatched roof industry in Lodtunduh Village, Ubud, shows that financial management and risk management are essential for the success of small and medium enterprises (SMEs). Financial education through simple bookkeeping is essential to provide in-depth understanding for business owners and managers. In addition, risks in this industry include competition, changes in customer demand and quality, and fluctuations in raw material prices. Solutions like product diversification and flexible marketing strategies can help manage these risks. Sustainable architectural building design is also a crucial factor. Collaboration between architects and industrial owners can create functional, aesthetic buildings resistant to extreme weather. Using sustainably sourced reeds and following environmentally friendly farming practices are essential steps in maintaining the balance of the ecosystem.

Techno-economic analysis of electrical flexibility in combustion-based district heating systems: A Swiss case study

Nowadays, the expected growth of local flexibility markets and demand-response mechanisms is urging researchers and practitioners to obtain flexibility from all possible devices, including those historically considered as “stiff”. To this end, this work proposes an alternative control strategy for combustion-based district heating systems allowing the pumping system to operate as a flexible load. The idea is investigated via simulation in the case study of Capriasca (Lugano), within the framework of the EU-H2020-ACCEPT project. Starting from historical on-field measurements of heat consumption, a techno-economic analysis is conducted upon the flexibility obtainable from the pumping system, along with its cost, in two different scenarios: (i) participation in a local flexibility market and (ii) participation in a demand response program. Eventually, further to proving the viability of the proposed idea, the analysis shows that percent flexibility between 25% and 70% of the pumping system rated power can be reached, depending on the heat consumption. The additional economic advantages of flexible DHS operation in low electricity price scenarios are also highlighted.

Labour market flexibility as a factor in economic recovery after the COVID-19 pandemic

The COVID-19 pandemic has largely undermined most economies in the world. To a significant extent the reasons behind this economic nosedive are rooted in the sphere of labour market. The imposed restriction measures made many workers stay at home, and part of them even lost their jobs. The speed of economic recovery in different countries varied depending on how quarantine restrictions were eased. One crucial factor in this process is labour market flexibility and its ability to adapt to changing economic conditions. The purpose of the paper is to explore the relationship between the labour market flexibility and the speed of GDP recovery when the pandemic was waning and the quarantine restrictions were being removed. Methodologically, the study relies on labour economics. The methods are multivariate and logistic regression analysis. The data for the study is sourced from the World Bank and Eurostat and comprises statistics for assessing labour market flexibility and GDP in various countries for 2020–2021. The findings indicate a reverse relationship between the speed of GDP growth recovery during the post-COVID period and the share of part-time employment. Yet taking into account that part-time employment is not only an indicator of the labour market flexibility, but also reflects a general slowdown in production and unemployment, we can attach low speed of recovery to a greater weakness of an economy. The obtained results are insufficient to reject the hypothesis that a more flexible labour market accelerates the recovery of a national economy. At the same time, the study demonstrates that the West European countries generally got over the consequences of the COVID-19 crisis faster than other EU countries. The research contributes to understanding the transformation processes in the labour market under the pandemic as well as provides support for labour market policy development and implementation.

Capacity limitation based local flexibility market for congestion management in distribution networks: Design and challenges

In this paper, five of the main design challenges of local flexibility markets (LFMs) for congestion management are identified and discussed based on desirable market properties from economics theory and literature review. The five main design challenges are low market liquidity, reliability, baselines, forecast errors at low aggregation levels, and the high cost of measurements. A comprehensive capacity-limitation based LFM design has been proposed to address the challenges and a simulation example is presented to illustrate the design. The proposed design facilitates market participants’ decision making by design elements that improve market liquidity, reliability and handling of forecast errors. Moreover, a new capacity limitation product is proposed that is not defined with respect to a baseline and does not require sub-meter measurements leading to lower costs and conflict-of-interest in delivery validation. Generic algorithms are also proposed for calculating utility and cost of the flexibility product. The proposed design and discussions can contribute to improving the inter-disciplinary area between engineering and economics while helping policy-makers and LFM stakeholders to further understand the problem from a multi-dimensional perspective.

Local reactive power management using solar pumping in isolated electrical systems

In this work, a new analysis of the solar pumping as a source to provide secondary regulation and local reactive management strategies into low-voltage grid, is addressed. Based on real generation data and the capabilities of a commercial solar inverter, the control and management of the different work modes of the power electronics is proposed to analyse the viability of the use of solar pumping systems to be active agents in the flexibility market. Finally, some regulatory issues are presented to evaluate the feasibility of this proposal.