Price Controls Research Articles

Business cycles, sectoral price stabilization, and climate change mitigation: A model of multi-sector growth in the tradition of the Bielefeld disequilibrium approach

Sectoral price stabilization is critical in the pressing context of de-globalization and the climate crisis. Strategic price controls may be effective in reducing economic volatility, but fail to curb emissions, unlike quantity controls such as rationing consumption. In contrast, carbon pricing may accelerate decarbonization, but generate inflationary pressures. In order to evaluate the effectiveness of sector-oriented policies in stabilizing sectoral prices and accelerating the low-carbon transition at the same time, this paper employs a novel environmentally-extended, data-driven dynamic model of multi-sector growth based on the Bielefeld disequilibrium approach to the microeconomic stability of competitive economies. The general composite model allows to empirically characterize the network structure and intensity of dynamic price-quantity interactions at the sector level, which capture heterogeneous firm behavior by integrating long-run Walrasian price and classical quantity dynamics coupled with short-run Keynesian features in the form of target rate of return pricing and demand-led investment. A Bayesian hierarchical model on US BEA data empirically estimates the linear adjustment coefficients and stable combinations are computed. The US economy is shown to feature a highly hierarchical network structure of intermediate production that is particularly vulnerable to micro-economic shocks driven by wars and climate change. Tax-subsidy schemes are shown to be the most effective in stabilizing sectoral prices and economy-environment interactions.

Access in all areas? A round up of developments in market access and health technology assessment: part 2.

In this latest update, we explore the Inflation Reduction Act (IRA) enacted by the US Congress in August 2022, with the Centers for Medicare and Medicaid Services (CMS)recently releasing the list of the first ten drugs it will negotiate prices on. We also cover the consequences of price controls and rigid value assessment in Germany which have led to the withdrawal of a number of medicines. It will be important to see how the IRA balances cost-saving with holistic value assessment, incentives for innovation and patient access to treatment.

Bilevel Programming for Manufacturers Operating in an Omnichannel Retailing Environment

In this article, we present a joint production, pricing, and inventory control problem that can help manufacturers manage revenue in an omnichannel environment. This article puts forward a multiperiod Stackelberg game between a manufacturer and a retailer, assuming the former to be the leader. The leader–follower game is formulated as a mixed-integer nonlinear bilevel optimization problem wherein both players seek to maximize their respective profits. The article envisions an omnichannel retailing environment where online, offline, direct, and drop-shipping channels coexist. It then investigates how enabling showrooming and webrooming on the drop-shipping channel account can affect the supply-chain profitabilities. The analyses suggest that when the customers are aided with showrooming and webrooming services and are allowed to place drop-shipping orders from retailers’ stores, additional profit can be generated in the supply chain. To solve the proposed bilevel optimization problem, we investigate single-level reduction using Karush–Kuhn–Tucker conditions and hierarchical optimization technique based on the simulated annealing and randomized decomposition solver. To assess the efficacy of the solution techniques, a comparative analysis is carried out. Thereafter, with the aid of numerical experiments and sensitivity analyses, this article draws the key managerial insights for manufacturers.

Research on Price Control Model for PPP Project of New Energy Vehicle Charging Facilities

Research on Price Control Model for PPP Project of New Energy Vehicle Charging Facilities

Examining how unemployment, inflation and their related aspects affected economic growth in Palestine: The period from 1991 to 2020

This study aims to focus on identifying how unemployment and inflation and their related aspects affect Palestinian economic growth. The study employed the Autoregressive Distributed Lag (ARDL) model employing annual time series data for estimate and result analysis. The ARDL model was estimated in both long and short run as follows; on one hand, the results showed that there is a potential negative impact of aspects-related unemployment on economic growth in Palestine over the long-term. On the other hand, over the long term also, it can be noticed that there is a positive impact of aspects-related inflation on economic growth in the state of Palestine. In the short term, a significant negative effect of unemployment (UN) was discovered on economic growth, while there was no effect of inflation (INF), despite being positive. The error-correction model (ECM) has been adopted in this model, and the results revealed that the ECM co-efficient [ECM (−1)] was positive and equaled to (0.0183) and therefore was not significant. Based on the results obtained, the study recommended that there a need to stabilize inflation through effective price control mechanisms that can enhance macroeconomic conditions, increase investor confidence, stimulate economic growth, and work to create opportunities for the full use of human resources by stimulating self-employment to engage in entrepreneurial activities according to the qualifications of graduates. Finally, it equips population, especially youth, with relevant skills to increase productivity and reduce unemployment.

Exploring the Value drivers for Platform Based Business: Scaling, Organizing, Financing, Controlling & Leveraging Networks among Multiple Parties

Platform-based business models have become increasingly popular in recent years. These models allow businesses to connect with customers in new and innovative ways, and they can offer several advantages over traditional channels. However, there is still a lack of understanding of the key value drivers that contribute to the success of platform-based business models. This study addresses this gap in the literature by conducting a two-step qualitative-empirical analysis to identify the value drivers of platform-based business models. In the first step, a systematic literature analysis (SLA) is conducted to outline the research landscape holistically and to identify existing value drivers. In the second step, data is collected from 15 expert interviews from Pakistani online platform-based companies to identify additional value drivers. The results of the study identify four categories of value drivers: Organization and scaling: the category includes factors such as the platform ecosystem, architecture, user acquisition, and willingness to participate. Financial performance: this category includes factors such as retention, performance-promise, resources, and abilities. Control mechanisms: the category includes factors such as pricing, performance measures, and behavioral control. Environment: This category includes factors such as technology and competition. The study also provides an overview of a large number of value drivers that have not been previously identified in the literature. These results can help platform operators in their strategic planning and can provide them with concrete measures for the successful implementation of a platform.

Die Verlängerung einer modifizierten Strompreisbremse zur Stärkung der deutschen Wirtschaft

Abstract This article summarises the results of a study on the Germany energy crisis and the need for an extension and modifications of the electricity price break. The study shows that the energy crisis led to a short-run output loss comparable to the output losses associated with the COVID-19 crisis in 2020 and the financial crisis in 2008/2009. In addition, real wage losses during the energy crisis are the largest losses on record. Finally, there is the risk of permanent economic damage leading to a period of economic stagnation. The extension and modification of the electricity price break until 2030 is an important policy instrument to help the Germany economy avoid economic stagnation. The argument in favour of such price controls is that the energy crisis has pushed the electricity price above its long-run equilibrium value.economic stagnation. The economiy argument in favor of such price controls is that the energy crisis has pushed the electricity price above its long-run equilibrium value.

Dynamic pricing and production control in a two‐item make‐to‐stock system with flexible dual sourcing and lost sales

We consider a joint control of pricing and production in a two‐item inventory system, where each item can be produced by its dedicated source or a shared flexible source, under the lost‐sales setting. The demands of the two items are correlated. Due to the complexity caused by the lost‐sales assumption and the interplay between pricing and production decisions, we show the optimal value function satisfies five structural properties under certain conditions. The optimal ordering and pricing policies are then fully characterized by five production curves and two pricing functions. Different from existing literature, we show that the optimal price path may not be monotone in the inventory level of either item. Next, we estimate the value of flexibility by comparing two systems, one with the flexible source only and the other with the dedicated source only, and show that the value of flexibility is positive (or negative) if the flexible source has a faster (or slower) production rate and a lower (or higher) production cost. Through numerical experiments, we find that in most cases flexibility and dynamic pricing are substitutes except for a few exceptions; and product substitution can either increase or decrease the value of flexibility.

Inflation in Yemen: A Threat to Stability and Development

This research study looks at the causes and consequences of inflation in Yemen, with a particular emphasis on the economic variables that contribute to inflationary pressures and the efficacy of strategic efforts in limiting their influence. The research takes a comprehensive approach, including both qualitative and quantitative approaches. A thorough examination of the current literature on inflation in Yemen is carried out in order to identify important economic variables driving inflation trends. In addition, case studies of strategic initiatives conducted by policymakers and international organizations are reviewed to assess their effectiveness in reducing inflation. The study's findings highlight numerous crucial economic elements that are fuelling Yemen's inflation. Notably, price controls, targeted subsidies, and other strategic interventions, such as monetary policy adjustments, have been shown to be beneficial in decreasing inflationary pressures. Furthermore, the study emphasizes the importance of political stability, foreign help, and structural reforms in strengthening Yemen's economy and its capacity to sustain stable pricing over time. Furthermore, examining strategic interventions improves comprehension of their efficiency in combatting inflation, while a full assessment of economic variables gives light on the underlying causes of inflation in Yemen.

Pork Consumption Patterns among Rural Residents in China: A Regional and Cultural Perspective (2000–2020)

Pork is a principal component of the food supply for residents in China, acting as a primary source of animal protein. Analyzing the factors affecting pork consumption among rural Chinese residents is critical for understanding trends in the pig market and the direction of price control. China encompasses an immense geographical area (ranked third in the world) and is home to a globally acknowledged cultural diversity. This results in China having a diverse range of regional and cultural characteristics. These factors may profoundly influence the meat consumption habits of rural residents in China in a real-world context. In econometric decision making, traditional fixed effects models are incapable of estimating regional and cultural factors as these come under individual effects. In this study, leveraging a distinct fixed-effect filter model recently developed, we estimate these regional and cultural variables to verify whether they are statistically significant. This approach adds a fresh perspective to traditional consumption theory. This study uses panel data from 31 provinces, municipalities, and autonomous regions registered in national data as the research object. The detailed findings include: (1) Rural residents in coastal provinces show a stronger inclination towards pork consumption compared to those in inland areas. (2) The ethnic feature of provinces also presents a significant impact, with provinces reflecting Mongolian, Zhuang, Tujia, and Yi ethnic characteristics pointing to higher pork consumption. This contrasts with provinces characterized by Yao, Li, and Muslim ethnicities, which tend towards the opposite. Based on these empirical findings, this paper provides policy suggestions for optimizing the layout of the pig industry, which will offer multi-dimensional regulatory directions for optimizing the pig industry layout in China.

The Substitution Effect of Preferential Tariffs on Nontariff Measures: Evidence from Vietnam

This study empirically investigates the effects of ASEAN Trade in Goods Agreement (ATIGA) tariffs on nontariff measures (NTMs) in Vietnam from 2012 to 2018. Our findings reveal the following: First, our gravity estimation demonstrates that although the reduction of ATIGA tariffs increases Vietnam's imports, the introduction of certain NTM types, particularly price control and finance measures, decreases them. Second, the reduction of ATIGA tariffs tends to introduce price control measures in particular. Third, when ATIGA tariffs decrease, the pre‐shipment inspection, nonautomatic licensing, and finance measures are more likely to be eliminated for products in which Vietnam has high export competitiveness. Fourth, both ATIGA tariffs and ASEAN+1 free trade agreement tariffs have significant effects on the introduction of NTMs in Vietnam. Finally, we found that the reduction in ATIGA tariffs also results in decreasing most favored nation tariffs.

Venezuela: Escaping the Resource Curse

As Juan Guaido inherited a debt and poverty-stricken economy characterized by hyperinflation as an ‘interim President’, the fear of his removal and dissolution of the Government engulfed him. He was worried about rising inflation, mismanagement of natural assets, rising fiscal debt, unemployment and poverty. He knew that the socialist policies adopted under the leadership of Chavez and Maduro had benefitted the citizens only for a brief period but had been the primary reason for the economy’s slowdown in the last decade. The economy underwent long periods of hyperinflation amounting to 130,060%, which has rarely been observed in any country worldwide ( Exhibit 1 , Exhibit 3 ). Venezuela is a classic case of a ‘petrostate’ exhibiting the characteristics of a ‘resource curse’. The expansionary fiscal policies, a large share of the government sector, subsidies, price controls, a ban on the private sector and erratic monetary policies contributed to the economic and political crisis. Juan knew the economy was bleeding, and almost seven million Venezuelans still fell into extreme poverty. He thought adopting a contractionary fiscal policy would increase unemployment, and many more would fall under the poverty line. On the other hand, expansionary monetary policy will further increase inflationary pressure. While sitting in his office, Juan thought, ‘Shall I go for a stringent tax policy to increase the government revenue or adopt the dollar as an official currency for curbing inflation?’

Enterprise R&D, manufacturing innovation and macroeconomic impact: An evaluation of China’s Policy

Amidst economic downturn pressures, major countries emphasized the manufacturing industry and increased research and development (R&D) investments to realize innovation in manufacturing. Manufacturing enterprises are the main performers of R&D investments, so it is imperative for policymakers to accurately evaluate the policy effect of different industrial tendency and policy intensity on growth. The impact of the overall R&D expenditure on macroeconomy or the effectiveness of enterprises’ R&D investment on business profit has been reported in a great deal of literature, but so far, the impacts of enterprises’ R&D have little been experimented at the macro level and industrial level. This paper improves the knowledge production function and structured a regional dynamic computable general equilibrium model to simulate the multi-dimensional macroeconomic impact of enterprises’ R&D investment. The results show that enterprises’ R&D investment has a significant role in promoting economic output, residents’ welfare, price control, and international trade, and its impact is declining over time. The impacts of enterprises’ R&D on different industries are heterogeneous; industries with lower knowledge capital are more sensitive to R&D investment. These findings contribute to the effectiveness of R&D policies.

Integrasi Pasar Jangka Pendek Ayam Broiler di Indonesia

One of the fast-growing livestock subsectors is the poultry sector. This livestock subsector produces broiler chicken meat as a strategic commodity in addition to beef, milk, and eggs. The level of broiler chicken meat consumption is the highest order, followed by native chicken consumption, then beef. Broiler meat is a rapidly growing strategic commodity. This study uses ECM model analysis to determine the short-term market integration in broiler chickens—time series data on broiler chicken prices at the producer level between January 2015 and December 2020. This analysis's first step is testing broiler chicken meat producer price data stationarity in 28 provinces. Data that are not stationary will be heteroscedastic (have autocorrelation). In addition, time series data that are not stationary can also produce spurious regression, a condition in which two or more variables have a causality relationship, but there is no theory or logic underlying the direct causality relationship between two or more of these variables. According to the findings of this investigation, there is no complete integration. According to the study's findings, the weak flow of information in the market is suspected, so the information transmitted is not perfect. This shows that the broiler meat market in Indonesia leads to imperfect competition. The broiler's construction meat commodity market leads to oligopsony. Government intervention is required to establish broiler meat price control policies with the primary consideration of focusing on the price leader market that will be transmitted in harmony with other regions to make the broiler meat market structure more competitive.

Can U.S. strategic petroleum reserves calm a tight market exacerbated by the Russia–Ukraine conflict?

Recent changes in global petroleum markets have driven the debate regarding the use of strategic petroleum reserves (SPRs) as a price management tool during periods marked by extreme price volatility. We examine the price management role of the U.S. SPR under typical market conditions and in extreme emergencies. Furthermore, we discuss the White House's hypotheses that (a) boosted Organization of the Petroleum Exporting Countries' (OPEC) production and releases from the U.S. SPR result in a negative pressure on U.S. gasoline inflation, and (b) crude oil releases from the U.S. SPR helps balance the global oil market. The threshold cointegration results indicate that U.S. SPR releases impact neither OPEC production nor imported input prices. We apply a hybrid open-economy Phillips curve to model gasoline inflation, accounting for backward- and forward-looking price settings, domestic and global slackness, and energy security. We distinguish between normal-, super-, and hyper-backwardation and -contango oil markets using threshold cointegration and regression techniques. Our results demonstrate that SPR releases and OPEC output increases generally decrease inflation, with a crucial exception being the hyper-backwardation market, as seen in 2021–2022. This period was characterized by severely constrained global supply buffers, including OPEC's spare capacity, exacerbated by the Russia–Ukraine conflict. For this period, we conclude that (1) the impact of OPEC production changes on gasoline inflation would be negligible, (2) excess domestic demand relative to domestic supply raises concerns about domestic energy security, and (3) the unprecedentedly large SPR drawdowns are likely to have caused the market to panic and contributed to gasoline price increases, contrary to arguments suggesting that the 2022 releases eased domestic gasoline prices. We conclude that the SPR is an ineffective price control mechanism during crises and may not have the strategic value previously thought in an extremely tight oil market.

EU OPEN STRATEGIC AUTONOMY POLICY AS A TRIGGER OF INDUSTRIAL DEVELOPMENT AND A CHALLENGE FOR REGULATORY COOPERATION

The purpose of the article is to study the instruments of the policy of strategic autonomy of the European Union with an emphasis on projects of common European interest, and to assess its impact on the development of the industrial potential of member countries in the context of intensified economic competition in the international arena, accompanied by the erosion of regulatory cooperation. EU strategic autonomy aims to reduce the productivity gap between the EU and the US in all sectors of the economy. Strategic autonomy, among other things, is aimed at updating the EU’s comprehensive industrial strategy, which will help counteract trends of deindustrialization, expand access to venture capital, and accelerate the formation of a truly single capacious market of EU member states. Strategic autonomy will affect the prospects for building a sustainable, climate-neutral and cost-effective system that contributes to the growth of citizens’ well-being. It has been established that the new approach to industrial policy is closely related to the policy of strategic autonomy of the EU; a whole range of measures is aimed at increasing the effectiveness of industrial policy: the adoption of an Action Plan for the proper implementation and compliance with the rules of the single market; review of EU competition rules; development of an Action Plan for the protection of intellectual property, which involves ensuring the technological sovereignty of the EU; combating the theft of intellectual property, improving legislation in the field of public procurement, taking into account environmental requirements. The New Industrial Policy identifies the key factors in the EU’s industrial transformation and aims to achieve a threefold objective: maintaining global industrial competitiveness and a level playing field both in the domestic market and at the global level; turning Europe into a climate-neutral part of the world by 2050; achieving digital leadership in the world. In essence, we are talking about a new quality of economic growth, a new environmental model. The strategy is aimed at increasing the strategic autonomy of the EU in a period of increasing global competition and provides for reducing dependence on external supplies of critical raw materials, developing key technologies strategically important for the industrial future of Europe. The EU’s strategic autonomy policy restricts trade and competition in several ways: through the implementation of quantitative restrictions (quotas; import bans; bans on foreign investment); through price controls, subsidies and standards that apply equally to domestic and foreign suppliers; by establishing new digital policy rules (new restrictions on data regulation; data exchange obligations; taxes on digital services; regulation of digital services markets). Choosing unbalanced policy priorities can lead to reduced investment efficiency, slower competition, slower innovation, and worsening productivity and technology gaps between the EU and the US. The regulatory potential of strategic autonomy to promote market distortions is usually justified by the benefits of safety for society, ethical and environmental considerations, welfare effects for consumers and increased competitiveness of producers, however, it is predicted that it will inevitably produce losses that will be incurred by economic entities. manufacturing practices, review of value chains and supply chains, and due to legal uncertainty associated with how regulation is developed and applied. This inevitably indicates the risks of increased regulatory competition on an international scale.

Optimal Policies for Dynamic Pricing and Inventory Control with Nonparametric Censored Demands

We study the classic model of joint pricing and inventory control with lost sales over T consecutive review periods. The firm does not know the demand distribution a priori and needs to learn it from historical censored demand data. We develop nonparametric online learning algorithms that converge to the clairvoyant optimal policy at the fastest possible speed. The fundamental challenges rely on that neither zeroth-order nor first-order feedbacks are accessible to the firm and reward at any single price is not observable due to demand censoring. We propose a novel inversion method based on empirical measures to consistently estimate the difference of the instantaneous reward functions at two prices, directly tackling the fundamental challenge brought by censored demands. Based on this technical innovation, we design bisection and trisection search methods that attain an [Formula: see text] regret for the case with concave reward functions, and we design an active tournament elimination method that attains [Formula: see text] regret when the reward functions are nonconcave. We complement the [Formula: see text] regret upper bound with a matching [Formula: see text] regret lower bound. The lower bound is established by a novel information-theoretical argument based on generalized squared Hellinger distance, which is significantly different from conventional arguments that are based on Kullback-Leibler divergence. Both the upper bound technique based on the “difference estimator” and the lower bound technique based on generalized Hellinger distance are new in the literature, and can be potentially applied to solve other inventory or censored demand type problems that involve learning. This paper was accepted by Jeannette Song, operations management. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4859 .

How to pay for saving the world: Modern Monetary Theory for a degrowth transition

Degrowth lacks a theory of how the state can finance ambitious social-ecological policies and public provisioning systems while maintaining macroeconomic stability during a reduction of economic activity. Addressing this question, we present a synthesis of degrowth scholarship and Modern Monetary Theory (MMT) rooted in their shared understanding of money as a public good and their common opposition to artificial scarcity. We present two arguments. First, we draw on MMT to argue that states with sufficient monetary sovereignty face no obstacle to funding the policies necessary for a just and sustainable degrowth transition. Increased public spending neither requires nor implies GDP growth. Second, we draw on degrowth research to bring MMT in line with ecological reality. MMT posits that fiscal spending is limited only by inflation, and thus the productive capacity of the economy. We argue that efforts to deal with this constraint must also pay attention to social and ecological limits. Based on this synthesis we propose a set of monetary and fiscal policies suitable for a stable degrowth transition, including a stronger regulation of private finance, tax reforms, price controls, public provisioning systems and an emancipatory job guarantee. This approach can support broad democratic mobilization for a degrowth transition.

A Critical Analysis on The Impact of Australian Natural Gas Price Cap Policy on Asset Value and Income

This paper provides an in-depth critical analysis on the impact of the Australian government's natural gas price cap policy on the asset values and income of major energy companies like Santos. It begins with detailed background information on Santos, examining its business operations, revenue streams, products and services, competitive landscape, and regulatory environment. A comprehensive financial analysis of key ratios from Santos' annual reports is then presented to evaluate liquidity, profitability, efficiency, and leverage trends. The paper highlights several salient business risks posed to Santos from commodity price volatility, operational risks in exploration and development activities, intense competitive pressures, and stringent regulatory compliance requirements. It then rigorously analyzes the significant effects of government-imposed price caps on gas prices on asset valuation and revenue recognition as two key audit matters, delving into the relevant accounting assertions and suggested audit procedures. The implications for the audit report and opinion are also discussed in-depth with regard to properly assessing risks and obtaining sufficient appropriate audit evidence as per Australian Auditing Standards. Overall, this paper conclusively demonstrates how the introduction of gas price controls can profoundly impact asset carrying values and revenues for major energy companies like Santos, posing critical risks of material misstatement that must be thoroughly evaluated and addressed in independent financial statement audits.

Are Price Controls Disrupting Clinical Trials and Stifling Medical Innovation?

While pricing controls imposed by the Inflation Reduction Act of 2022 (IRS) may appear positive for patients in the short term, and is considered a step forward in improving affordability of, and access to, innovative medical treatments, these controls may have unintended consequences on biopharmaceutical drug development programs and investments in the long term unless this pressure is offset by the opportunity to modernize the way clinical trials are conducted.