Post by account_disabled on Feb 20, 2024 2:20:59 GMT -5
The days of last May, a discussion took place – I think it was overly interested – about whether the way energy prices are set in its different variants by the most expensive price in the wholesale market of the energy mix gives rise to benefits. extraordinary for electric companies or not. And the issue is not over but is going on for a long time. Of course Mr. Garamendi, president of the most important employers' association, denies it and so does some economist like José Carlos Díez. But to focus the issue, the question is not simply whether this method gives extraordinary benefits – which it does – but whether this also supposes Ricardian rents because, in this case, at least part of those benefits are derived exclusively from the method of setting prices. prices . In this case, only by changing the method part of these benefits will be avoided and, with this, energy prices in all its variants and procedures would drop.
And just as important as the above is whether this method of setting the price of kwh for all forms or procedures of obtaining energy such as hydraulics, combined cycle, solar, wind, coal, oil, etc., constitutes or not a efficient allocation of resources , just as neoliberals should defend if they were consistent with their economic Australia Phone Number principles. To this we must answer that a system that sets the price in an auction by the most expensive method cannot be efficient, but only that procedure that sets a single price by matching supply with demand in a market or auction that is or simulate a competitive market without market failures ! Towards a structural (Srafian) explanation of inflation If we assume that demand is given, only a system on the supply side that uses resources to obtain the same product will be efficient in such a way that the final price - is set bureaucratically, be it by auction or is a fruit of supply and demand – equal to the marginal costs of each of the procedures. Only then can a production level of each procedure be determined that is efficient at least on the production side.
We know this with certainty at least from the work of León Walras and topped by the criteria of Wilfredo Pareto and others. It is clear that the procedure used until now in the European market for setting prices and, as a consequence, the various procedures for obtaining energy, gives rise to inefficient allocations . This has two effects: more expensive energy and less supply . Since the latter – the less supply – is obvious to anyone who knows the appropriate ways of optimally allocating resources with the current pricing system, we are going to focus on whether these extraordinary profits of the electricity companies give rise to profits plus Ricardian rents. . David Ricardo says that these incomes “are always the difference between the product obtained through the use of two equal capitals of capital and labor.” Translated into modern language and the at least European energy system, what it means is that there are various ways or procedures to obtain the same product and, given that the price of this product is the same regardless of the unit costs of obtaining it, the part is income.
And just as important as the above is whether this method of setting the price of kwh for all forms or procedures of obtaining energy such as hydraulics, combined cycle, solar, wind, coal, oil, etc., constitutes or not a efficient allocation of resources , just as neoliberals should defend if they were consistent with their economic Australia Phone Number principles. To this we must answer that a system that sets the price in an auction by the most expensive method cannot be efficient, but only that procedure that sets a single price by matching supply with demand in a market or auction that is or simulate a competitive market without market failures ! Towards a structural (Srafian) explanation of inflation If we assume that demand is given, only a system on the supply side that uses resources to obtain the same product will be efficient in such a way that the final price - is set bureaucratically, be it by auction or is a fruit of supply and demand – equal to the marginal costs of each of the procedures. Only then can a production level of each procedure be determined that is efficient at least on the production side.
We know this with certainty at least from the work of León Walras and topped by the criteria of Wilfredo Pareto and others. It is clear that the procedure used until now in the European market for setting prices and, as a consequence, the various procedures for obtaining energy, gives rise to inefficient allocations . This has two effects: more expensive energy and less supply . Since the latter – the less supply – is obvious to anyone who knows the appropriate ways of optimally allocating resources with the current pricing system, we are going to focus on whether these extraordinary profits of the electricity companies give rise to profits plus Ricardian rents. . David Ricardo says that these incomes “are always the difference between the product obtained through the use of two equal capitals of capital and labor.” Translated into modern language and the at least European energy system, what it means is that there are various ways or procedures to obtain the same product and, given that the price of this product is the same regardless of the unit costs of obtaining it, the part is income.