Regulated Markets Are Slow to Handle Change
Gowrisankaran, Langer and Reguant have an excellent paper, Energy Transitions in Regulated Markets (WP), in the latest AER. The basic idea is that regulation designed to prevent utilities from building useless power plants can induce them to keep obsolete power plants. Some background. We regulated electric utilities under the theory that they were natural monopolies […] The post Regulated…
We haven't written up this one. Marginal Revolution has the full story — the link below goes straight to it.
