This paper examines the feasibility of implementing Linear Quadratic Gaussian (LQG) Control in structural cointegrated VAR models and sheds some light on the two major problems generated by such implementation. The first aspect to be taken into account is the effect of the presence of unit roots...

This paper attempts to characterise an anti-inflationary monetary targeting (MT) regime. In order to derive a formal representation of this regime, we formulate the central bank’s optimisation problem under the assumption that it is possible for the monetary targeted variable to have an impact...

Growth of wages, unemployment, employment and vacancies exhibit strong asymmetries between expansionary and contractionary phases. In this paper we analyze to what degree downward wage rigidities in the bargaining process affect other variables of the economy. We introduce asymmetric wage...

The targeted increase of renewable energy sources in the European energy mix to 20% by 2020, and the goal of an 80-95% CO2 emissions reduction by 2050, will require changes to and extensions of the electricity grid. The integration of increasing shares of fluctuating renewable electricity,...

The Evaluation Unit of the European Commission (EC’s) Directorate-General for International Cooperation and Development (DG DEVCO) commissioned PEM to conduct an independent evaluation of the European Union’s cooperation with sustainable energy (2011-2016). The purpose of this Report is to...