Academic literature on the topic 'Decisional models, international markets, theory'

Abstract Because of the long-standing Canada-United States lumber trade dispute and the current pressure on the world's forests as a renewable energy source, much attention has been directed toward the modelling of international trade in wood products. Two types of trade models are described in this book: one is rooted in economic theory and mathematical programming, and the other consists of two econometric/statistical models--a gravity model rooted in theory and an approach known as GVAR that relies on time series analyses. The purpose of the book is to provide the background theory behind models and enable readers to easily construct their own models to analyze policy questions, whether in forestry or another sector. Examples in the book illustrate how models can be used to say something about a variety of issues, including identification of the gains and losses to various players in the North American softwood lumber business, and the potential for redirecting sales of lumber to countries outside the United States. The discussion is expanded to include other products besides lumber, and used to examine, for example, the effects of log export restrictions by one naton on all other forestry jurisdictions, the impacts of climate policies as they relate to the global forest sector, and the impact of oil prices on forest product markets throughout the world.

Time and space are two dimensions that are likely to provide the paths—either singly or in tandem—by which international policy decisions are interdependent. There are several reasons to expect international relations processes to be interdependent across space, time, or both dimensions. Theoretical approaches such as rational expectations models, bureaucratic models of decision-making, and psychological explanations of international phenomena at least implicitly assume—and in many cases explicitly predict—dependence structures within data. One approach that researchers can use to test whether their international processes of interest are marked by dependence across time, space, or both time and space, is to explicitly model and interpret the hypothesized underlying dependence structures. There are two areas of spatial modeling at the research frontier: spatial models with qualitative and limited dependent variables, an co-evolution models of structure and behavior. These models have theoretical implications that are likely to be useful for international relations research. However, a gap remains between the kinds of empirical models demanded by international relations data and theory and the supply of time series and spatial econometric models that are available to those doing applied research. There is a need to develop appropriate models of temporal and spatial interdependence for qualitative and limited dependent variables, and for better models in which outcomes and structures of interdependence are jointly endogenous.

A network may refer to “a group of interdependent actors and the relationships among them,” or to a set of nodes linked by a web of interdependencies. The concept of networks has its origins in earlier philosophical and sociological ideas such as Jean-Jacques Rousseau’s “general will” and Émile Durkheim’s “social facts”, which adressed social and political communities and how decisions are mediated and ideas are structured within them. Networks encompass a wide range of theoretical interpretations and critical applications across different disciplines, including governance networks, policy networks, public administration networks, social movement networks, intergovernmental networks, social networks, trade networks, computer networks, information networks, and neural networks. Governance networks have been proposed as alternative pluricentric governance models representing a new form of negotiated governance based on interdependence, negotiation and trust. Such networks differ from the competitive market regulation and state hierarchical control in three aspects: the relationship between the actors, decision-making processes, and compliance. The decision-making processes within governance networks are founded on a reflexive rationality rather than the “procedural rationality” which characterizes the competitive market regulation and the “substantial rationality” which underpins authoritative state regulation. Network theory has proved especially useful for scholars in positing the existence of loosely defined and informal webs of experts or advocates that can have a real and substantial influence on international relations discourse and policy. Two examples of the use of network theory in action are transnational advocacy networks and epistemic communities.

AbstractThe global financial system’s interconnectedness has increased due to globalization, technological advancements and the integration of financial markets. Financial institutions and markets across different countries are more closely linked than ever before; while this interconnectedness facilitates global trade and investment, it also means that financial turmoil can quickly spread from one country to another. Systemic risk is the possibility that an event at the company level could trigger severe instability or collapse an entire industry or economy. The fall of Lehman Brothers in 2008 showed that the failure of a single entity could have far-reaching effects on the global financial system. This chapter innovatively interprets the financial system as a complex network formed by the relationships among various “nodes”: banks, financial institutions, markets, and consumers. These networks are intricate and opaque, making it challenging to understand and predict how risks and failures in one part of the system can affect the rest with a domino impact. In managing systemic risk, regulators and policymakers play a vital role, implementing stricter regulatory frameworks, overseeing financial institutions more closely, and developing mechanisms to identify and mitigate risks early. This chapter shows that effective strategies to mitigate systemic risk involve better risk assessment models, more robust regulatory frameworks, and international cooperation among regulatory bodies. Stress testing, capital adequacy requirements, and monitoring of “too big to fail” institutions, as well as of “too interconnected to fail” ones, are part of these strategies, that may usefully consider network theory to link economic agents to their edging patterns.

This chapter seeks to identify useful game-theoretic insights concerning key issues of business ethics in emerging economies. The study considers four elements in this sequence: game theory, emerging economies, business ethics, and key issues. The chapter does not undertake formal modeling but rather emphasizes useful insights. Game theory provides assistance in reasoning about strategic scenarios for businesses in emerging economies. A multinational entity operates within layers of institutions and norms from international to national and sub-national levels. The approach taken here is to inquire into certain specific decision scenarios available in the extant literature as instances of important classes of decision problems. These scenarios involve long-term sustainable business models, corporate values, and corporate reputation.

This chapter looks at the new European capital markets. The creation of the European Securities and Markets Authority (ESMA) was ‘an epochal date for EU financial market regulation’. Whereas ESMA's role is primarily one of overall supervision and promotion of supervisory convergence, the 2007–09 financial crisis, which led to its birth, continues incrementally to push the European legislator toward reinforcing ESMA's powers and capturing increasingly more activities under the ‘Single Rulebook’. With the proposal of a Capital Markets Union and Brexit, this trend is likely to continue. Potentially, the European Union is now well placed to forge a new paradigm for the regulation of capital markets, given the increased focus and the technical expertise which ESMA brings to bear. At least in theory, the EU should no longer be beholden to US or international models for its regulatory models.

The model differs from the neoclassical synthesis by emphasizing the need to divide the private sector between the household and corporate sectors, as business managers do not act as if they were at the direct behest of shareholders. Companies do not ‘profit maximize’. Bond yields and equity returns are derived independently. Contrary to the Miller-Modigliani Theorem the cost of capital, and thus the value of the produced capital stock, varies with leverage. The risk aversion of investors results in the mean reversion of real equity returns at around 6.7 per cent and applies internationally. Corporate decisions are made by managers whose behaviour is determined by a utility function which is different from that which determines the portfolio preferences of the owners of capital.

Abstract In the previous chapters, models have been discussed that are based on the assumption of perfect competition in all goods and factor markets. This assumption simplifies the analysis considerably and in many cases it is also a satisfactory approximation to real markets. However, not all markets are ap proximately competitive and this limits the applicability of perfect-competition models. For example, traditional models fail to explain the large share of intra industry trade, i.e. trade in similar commodities between similar countries. Moreover, some of the policy implications derived from these models depend decisively on the assumption of price-taking behavior and zero profits. In the late 1970s and early 1980s, a ‘ new’ trade theory was established and one started to use the tools of modern industrial economics to look at non-competitive market structures. In the meantime, this approach has been incorporated into the main body of modern international trade theory.

The following text concentrates on the presence of the translator, who plays a multitude of roles in the life of translatology, e.g. “transparent glass” or “efficient interface,” depending on the perspective. The translator, currently seen as an object of analysis by theorists of translation, is treated as a person entitled to make decisions, conscious decisions, and who becomes a source whose translation may be interpreted. Due to the inevitability of the translator’s presence in the translated text, it is worth looking at the source text through the translator’s eyes and analyzing his or her decisions. The theoretical background of this article is Langacker’s model pertaining to the choice of linguistic means that convey the language-user’s intentions best; Lakoff’s theory of metaphors; and George Lüdi’s theory of marks left by the translator in the translated text. The analyzed texts have been taken from the different translations of the Bible such as: the Jakub Wujek Bible, New International Version, and the Millennium Bible. The analysis proves that the translator as a subject is a source of research whose direction has changed in the recent years.

Many experience cybersecurity talent gaps at a local level. They see positions that go unfilled or filled with people without the requisite skills; they see data and identity compromises, projects that are stymied, and heightened risks. They have to address this gap locally by educating individuals through the talent pipeline, supporting learning and training programs, cross-training employees into cybersecurity endeavors, placing classified ads/head-hunting and hiring ever-more-expensive talent, and so on. They go to outside vendors to support the work. For those in the proverbial trenches, understanding this global labor market challenge at the 30,000-foot level may be helpful. This work models the projected processes and outcomes of the cybersecurity talent gap through multiple means: a review of the literature, general systems theory, social network analysis, game theory, and abductive logic, and up-to-date data.

Abstract The contributions to this book are the output of a research project which aimed to study two key aspects of the international dimension of environmental policy. First, for trans boundary environmental problems, such as those of climate change and acid rain, it is necessary for countries to engage in some form of international environmental agreement to overcome the well-known incentives for free-riding. Second, even if pollution were an entirely domestic concern, countries are linked through trade, and environmental policies will affect the international competitiveness of particular sectors of an economy. This has led to fears that if governments become concerned about this loss of competitiveness they may set too lax environmental policies, essentially as a form of covert protection. A counter-claim has been that such strategic trade considerations may actually induce governments to set tough environmental policies to give their domestic producers a competitive advantage in developing ‘green’ tech-nologies ahead of their rivals. These two issues are closely linked, since an important consideration for a country deciding whether or not to join an international environmental agreement is the economic cost of having to set tougher environmental policies than at least some other countries, assuming that not all countries join the agreement. The project was designed to develop both theoretical and empirical economic models to explore these issues. For the second set of issues, the innovative feature of the project was that almost all of the extant theoretical and empirical analysis of the link between environmental policy and international trade had assumed competitive markets, and the project aimed to use the developments in the ‘new trade theory’ to reappraise this link for sectors where, because of significant economies of scale, markets were imperfectly competitive. This reappraisal concerns both the size of the impact of environmental policy on competitiveness and the policy implications that have been drawn about the design of environmental policy.

The purpose of the article is to substantiate a set of theoretical and practical principles for provision of analytical information to the management system of agricultural enterprises. Methodology. Methods of theoretical generalization and concretization, Internet resources have been used in this study. Results. Two interacting systems, namely a managing and managed ones, have been identified. The managing system involves the subjects of management, i.e. the apparatus of enterprise management. It is the managing system that implements the main functions of management (planning, organization, motivation, control) through management decisions. The managed system involves the object of management, i.e. it is economic (operational, investment, financial) activities of the enterprise. The process of business management is carried out through the collection of information about the object of management and the results of previous decisions, analysis of this information and making new management decisions based on such analysis. The objects, stages and technology of organization of analytical process are formed. The integration of approaches, methods and models of support for management decision-making at the agricultural enterprise is revealed, namely indicator method, resourcefunctional approach, integrated approach, approach based on the theory of economic risks. The financial and economic activity of LLC “Courland” in the context of using information support in its management system by the main economic indicators of resources and results, production program and level of marketability of the main agricultural products, liquidity of the balance, financial stability and solvency, business activity, indicators of profitability of the enterprise. It is substantiated that the introduction of management system and timely data processing allowed the company to achieve positive changes in the results and form trends towards the growth, organize the work of structural units, main activities, and to achieve economic effect. Organizational regulations on the organization of analytical service and coordination of work of persons engaged in analysis and conducting analytical work are proposed. It is proved that Regulations on the Analysis Department should be the main organizational regulation, on the basis of which the methodological guidance, organization and conduct of economic analysis at the enterprise is carried out. Practical implications. Taking into account the impact of features of the agriculture on the formation of analytical information enables to carry out a comprehensive assessment of economic and social results, to develop quantitative and qualitative indicators of efficiency. Value/originality. The integration of approaches, methods and models that has been considered will increase the rationality of management decisions by adjusting the probability of the event occurrence and selecting the best project among the alternatives by the criterion of profit maximization. Implementation of the management system and timely data processing allowed the company to achieve positive changes in the results and to form growth trends, organize the work of structural units, the main activities, and to achieve the economic effect. Determination of management elements in the digital space will let domestic enterprises take a proper place in the international cooperation and competitive advantages in the market.

The article summarizes the accumulated practical experience of the authors in the development of algorithms for the formation of investment strategies. For this purpose, the optimization of the studied parameters, information support of investment activities, verification, monitoring and adjustment in the testing mode and the subsequent practical application of the described tools are considered. The system is based on the main provisions of the Markowitz portfolio theory. The analytical block of the Information System Portfolio Investor includes Profitability-Risk model; empirical models of optimal complexity; hybrid predictive model systems; the principle of combining (integrating) both models and forecasts, as well as decision rules; optimization of the training sample length (modified Markowitz model); optimization of the frequency of monitoring and adjusting the composition of the investment portfolio. The principles of design and development of the information block of the system, its replenishment and functioning are described in detail. All the above listed components of the algorithmic content of the investment decision making system are described sequentially. The system modules have been successfully tested on a wide class of financial instruments: ordinary shares, preferred shares, government and corporate bonds, exchange commodities, stock, commodity, industry and bond indices, exchange-traded investment funds and real estate funds. The implemented Markowitz model with a dynamic database of historical data can significantly increase the efficiency of investment decisions, which is facilitated by taking into account the characteristics of both the markets under study and the corresponding financial instruments.

Interest rate, currency supply, and other financial instrument management are all part of monetary policy, which is mostly within the jurisdiction of central banks. Controlling inflation, promoting investment, maintaining stability, and eventually promoting economic growth are its many objectives. Strong institutions and a high level of confidence in their monetary policies are frequently advantages of developed economies. Georgia and other growing economies, on the other hand, have unique difficulties. Market instability, limited access to international finance, and dependence on external markets frequently influence their policy decisions and results.

The prevailing opinion exists that investors include to their portfolio what they know or what is located around them. Investment decision, which is impacted by familiarity bias, avoid including international companies to portfolio which might lead to lower performance compared to portfolio which has both, local and international, stocks in a portfolio. The aim of this study is to analyse the impact of familiarity bias on investment decision, to form port-folios from the stocks listed on the Nasdaq Baltic stock exchange and compare their performance to global portfolios, which are formed from the stocks listed on the New York Stock Exchange. Investment portfolios were built using mean variance (MV) and Black–Litterman (BL) models. The analysis revealed that the returns of the portfolios built on the Nasdaq Baltic exchange are higher than the returns of the global portfolios. Additionally, the volatility of returns is lower for Nasdaq Baltic portfolios. When selected markets have different growth rates, investment decisions based on familiarity bias can achieve better results.

Purpose of the article: The purpose of this article is to explore the relationship between visual merchandising techniques and cultural contexts, analyzing how these factors influence consumer behavior across various regions. It aims to provide insights for marketers and retailers on the importance of culturally informed visual merchandising strategies in global markets. Methodology: The research employs a comparative analysis of case studies from multiple countries. It examines various visual merchandising strategies such as color symbolism, product placement, and storytelling within distinct cultural settings, investigating how these elements shape consumer perceptions, decision-making, and brand loyalty. Conclusions: The study concludes that cultural values, traditions, and consumer expectations play a pivotal role in shaping visual merchandising strategies. Brands that effectively incorporate cultural nuances into their visual merchandising can create stronger consumer connections, improving engagement and fostering brand loyalty across diverse markets. Originality: This research adds to the discourse on international marketing by highlighting the crucial role of cultural understanding in visual merchandising. It emphasizes the need for brands to tailor their retail strategies according to cultural contexts, offering new insights into enhancing retail effectiveness on a global scale.

The use of AI-based decision aids in diverse domains has inspired many empirical investigations into how AI models’ decision recommendations impact humans’ decision accuracy in AI-assisted decision making, while explorations on the impacts on humans’ decision fairness are largely lacking despite their clear importance. In this paper, using a real-world business decision making scenario—bidding in rental housing markets—as our testbed, we present an experimental study on understanding how the bias level of the AI-based decision aid as well as the provision of AI explanations affect the fairness level of humans’ decisions, both during and after their usage of the decision aid. Our results suggest that when people are assisted by an AI-based decision aid, both the higher level of racial biases the decision aid exhibits and surprisingly, the presence of AI explanations, result in more unfair human decisions across racial groups. Moreover, these impacts are partly made through triggering humans’ “disparate interactions” with AI. However, regardless of the AI bias level and the presence of AI explanations, when people return to make independent decisions after their usage of the AI-based decision aid, their decisions no longer exhibit significant unfairness across racial groups.

Rigidity of the financial reporting model in contemporary business conditions the era of the „knowledge economy” influenced the creation of significant differences between the market and book values of companies. Characteristic of enterprises in the „new” economy is the high share of knowledge and other intellectual resources in the structure of total assets, which are at the same time the basic source of competitiveness of enterprises. Given the changing habits of consumers who are inclined to buy products on the market that identify a high degree of „embedded” knowledge, companies base their business on investing in R&D and investing in various types of intellectual property and protecting them. Due to certain limitations of financial reporting when identifying and measuring intellectual resources in an enterprise, users of financial statements are unable to get a realistic picture of the value of assets and the corresponding investments when it comes to certain types of intangible assets. Blurred financial reality can lead to irrational decisions, stagnation in business and major financial crashes, which is often the practice of large companies listed on the world stock market due to the overestimation / undervaluation of their book value. The aim of this paper is to explain the treatment of intangible assets through international accounting standards concerning the identification, recognition and measurement of intellectual resources and intangible assets, to analyze their limitations and to point out possible directions for their further development in order to provide reliable and credible reporting on assets and capital of economic entities.

The development of law is faced with many challenges, including the creation and testing of new information and communication technologies. At the same time, the law must quickly react with a set of legitimate means of reg­ulation to guarantee legal certainty in relations. Cryptocurrencies are a manifes­tation product of rapidly developing technology entering civil turnover at an in­creasingly rapid pace. The paper aims to examine the various legal aspects of cryptocurrencies in the EU and to reveal the relationship between the stock mar­ket, investors’ decisions, and cryptocurrency. It clarifies the concept of crypto­currency, comparing it to the millennia-old fiat money. In addition, the research traces the cryptocurrencies and their status as essential legal assets in the EU market. To test the relationship between the capital market, the investors ‘be­havior, and cryptocurrency, we apply the regression model, correlation anal­ysis, and Granger Causality Test. The explored variables include the Crypto In­dex (CRIX), the Sentix sentiment index, and the capital market index. We prove that the cryptocurrency market influences the stock market, which may be ex­plained by the fact that the investors in the crypto markets are better informed than those in the traditional financial markets.

This working paper presents an overview of recent climate change developments, in particular with regards to carbon markets under the Clean Development Mechanism (CDM). The first section of this paper describes the history of the climate change negotiations. Section two presents an overview of the recent decisions adopted at the last international meetings (Bonn Agreements and Marrakech Accord), which have improved the odds of ratification of the Kyoto Protocol by 2002. The third section analyzes the carbon credit market. The first part of the carbon credit section briefly presents the available information regarding real carbon credit transactions, while the second part focuses on the literature review of several theoretical models and presents the theoretical estimates of the price and size of the carbon market.

We need a new way of talking about global warming. UN Secretary General António Guterres underscored this when he said the “era of global boiling” has arrived. Although we have made remarkable progress on a very complex problem over the past thirty years, we have a long way to go before we can keep the global temperature increase to below 2°C relative to the pre-industrial times. Climate models suggest that this next decade is critical if we are to avert the worst consequences of climate change. The world must continue to reduce greenhouse gas emissions, and find ways to adapt and build resilience among vulnerable communities. At the same time, we need to find new ways to remove carbon dioxide from the atmosphere in order to chart a “net negative” emissions pathway. Given their large capacity for carbon storage, the oceans must be included in consideration of our multiple carbon dioxide removal (CDR) options. This report focused on ocean iron fertilization (OIF) for marine CDR. This is by no means a new scientific endeavor. Several members of ExOIS (Exploring Ocean Iron Solutions) have been studying this issue for decades, but the emergence of runaway climate impacts has motivated this group to consider a responsible path forward for marine CDR. That path needs to ensure that future choices are based upon the best science and social considerations required to reduce human suffering and counter economic and ecological losses, while limiting and even reversing the negative impacts that climate change is already having on the ocean and the rest of the planet. Prior studies have confirmed that the addition of small amounts of iron in some parts of the ocean is effective at stimulating phytoplankton growth. Through enhanced photosynthesis, carbon dioxide can not only be removed from the atmosphere but a fraction can also be transferred to durable storage in the deep sea. However, prior studies were not designed to quantify how effective this storage can be, or how wise OIF might be as a marine CDR approach. ExOIS is a consortium that was created in 2022 to consider what OIF studies are needed to answer critical questions about the potential efficiency and ecological impacts of marine CDR (http://oceaniron.org). Owing to concerns surrounding the ethics of marine CDR, ExOIS is organized around a responsible code of conduct that prioritizes activities for the collective benefit of our planet with an emphasis on open and transparent studies that include public engagement. Our goal is to establish open-source conventions for implementing OIF for marine CDR that can be assessed with appropriate monitoring, reporting, and verification (MRV) protocols, going beyond just carbon accounting, to assess ecological and other non-carbon environmental effects (eMRV). As urgent as this is, it will still take 5 to 10 years of intensive work and considerable resources to accomplish this goal. We present here a “Paths Forward’’ report that stems from a week-long workshop held at the Moss Landing Marine Laboratories in May 2023 that was attended by international experts spanning atmospheric, oceanographic, and social sciences as well as legal specialists (see inside back cover). At the workshop, we reviewed prior OIF studies, distilled the lessons learned, and proposed several paths forward over the next decade to lay the foundation for evaluating OIF for marine CDR. Our discussion very quickly resulted in a recommendation for the need to establish multiple “Ocean Iron Observatories’’ where, through observations and modeling, we would be able to assess with a high degree of certainty both the durable removal of atmospheric carbon dioxide—which we term the “centennial tonne”—and the ecological response of the ocean. In a five-year phase I period, we prioritize five major research activities: 1. Next generation field studies: Studies of long-term (durable) carbon storage will need to be longer (year or more) and larger (>10,000 km2) than past experiments, organized around existing tools and models, but with greater reliance on autonomous platforms. While prior studies suggested that ocean systems return to ambient conditions once iron infusion is stopped, this needs to be verified. We suggest that these next field experiments take place in the NE Pacific to assess the processes controlling carbon removal efficiencies, as well as the intended and unintended ecological and geochemical consequences. 2. Regional, global and field study modeling Incorporation of new observations and model intercomparisons are essential to accurately represent how iron cycling processes regulate OIF effects on marine ecosystems and carbon sequestration, to support experimental planning for large-scale MRV, and to guide decision making on marine CDR choices. 3. New forms of iron and delivery mechanisms Rigorous testing and comparison of new forms of iron and their potential delivery mechanisms is needed to optimize phytoplankton growth while minimizing the financial and carbon costs of OIF. Efficiency gains are expected to generate responses closer to those of natural OIF events. 4. Monitoring, reporting, and verification: Advances in observational technologies and platforms are needed to support the development, validation, and maintenance of models required for MRV of large-scale OIF deployment. In addition to tracking carbon storage and efficiency, prioritizing eMRV will be key to developing regulated carbon markets. 5. Governance and stakeholder engagement: Attention to social dimensions, governance, and stakeholder perceptions will be essential from the start, with particular emphasis on expanding the diversity of groups engaged in marine CDR across the globe. This feedback will be a critical component underlying future decisions about whether to proceed, or not, with OIF for marine CDR. Paramount in the plan is the need to move carefully. Our goal is to conduct these five activities in parallel to inform decisions steering the establishment of ocean iron observatories at multiple locations in phase II. When completed, this decadal plan will provide a rich knowledge base to guide decisions about if, when, where, and under what conditions OIF might be responsibly implemented for marine CDR. The consensus of our workshop and this report is that now is the time for actionable studies to begin. Quite simply, we suggest that some form of marine CDR will be essential to slow down and reverse the most severe consequences of our disrupted climate. OIF has the potential to be one of these climate mitigation strategies. We have the opportunity and obligation to invest in the knowledge necessary to ensure that we can make scientifically and ethically sound decisions for the future of our planet.

This report analyses the Technological Innovation System (TIS) of Building Integrated Photovoltaics (BIPV) in Austria. The study’s scope is consistent with the IEA PVPS Task 15 report [1].The analysis aims to facilitate and support the innovation, development, and implementation of industrial solutions of BIPV technologies. In Austria, the use of BIPV is still a niche application and covers under 2% of all implemented PV systems [1]. BIPV technology in Austria has historically developed with the support of different public financial incentives, national and European. The history of BIPV is somehow tightened to the history of PV. The first BIPV prototypes were developed by PV companies in the framework of national or European research activities, with the first development and innovation projects starting around 2003. In general, it should be mentioned that in the last years, PV and BIPV companies have increased specialization in the production of BIPV, especially colored and semitransparent PV modules. In this regard, a wide range of variants are offered (printing, coating, films). The colored components are mainly purchased from glass companies or polymer film producers. Another trend in Austria is the production of transparent glass/glass modules for integration in facades, skylights, winter gardens, or courtyard roofing. In 2020, the government of Austria presented a program called EAG (Erneuerabre Ausbau Gesetz) or Renewable Expansion Act [3.3.1 Hard institutions]containing certain working points to be implemented by 2024. Some of the measures are directly or indirectly relevant to the BIPV development and installation. Such as the PV encapsulation films using interference pigment technology from Lenzing Plastics. This TIS assessed the BIPV market through eight functional areas and provided the following results: ⁃ The analysis of knowledge development showed that it can be classified as moderate. On the one hand, there are not enough training and further education opportunities in the field of BIPV available, but on the other hand, the PV manufacturers and research institutions are driving forward the development of knowledge in the field of BIPV. ⁃ Knowledge dissemination is well advanced internationally within the research community but insufficient at the practical, national level, particularly between the PV industry and the construction sector. Architects are demanding more information from PV manufacturers and suppliers, who share their information only irregularly with the architectural community. Usually, architects obtain this information from PV technology platforms through workshops, brochures, and projects. However, architects have to engage with it more extensively. The goal is to make BIPV more appealing to architects. Thus, we have to summarize that knowledge dissemination is inadequate/weak. ⁃ Entrepreneurial willingness to experiment can be classified as moderate. Overall, it can be said that there are four players in the Austrian BIPV market and a substantial number of newcomers and small innovative players who could take the role of innovation drivers. However, there are too few opportunities for highly specialized small companies. ⁃ Resource mobilization is well positioned financially and in terms of network services. However, and this is essential if we want to expand the BIPV market strongly, there is a lack of skilled personnel (human resources) to carry out the expansion, which is why this function is rated to only be moderate. ⁃ The scoring of social capital is weak. The connection where there is a lack of communication is between the (BI)PV planner and the architects. In most projects, the (BI)PV planner is not involved in the early stages of the building design process. In addition, conventional PV planners have no experience or are hesitant of planning BIPV systems. ⁃ The legitimacy is moderate, but as the acceptance of PV improves from year to year, the chance of better acceptance of PV integrated into the building, i.e., BIPV, also increases. However, there are still reservations and resistance towards individual, specific BIPV projects. This resistance could be reduced by increasing knowledge about the multifunctional possibilities of BIPV at the decision-maker and customer stage as well as by showing best practice examples - Guidance of the search is moderate, as there are no specific political targets for BIPV, but there are for PV. However, the government and relevant authorities aim to implement clean energy development positively and apply applicable policies and regulations. There is an increased subsidy for innovative PV solutions [2] which also includes BIPV. ⁃ It can be stated that the market formation of BIPV in Austria still offers room for improvement. When it comes to governmental-driven incentives and support for the BIPVmarket development, the missing technical standards (e.g., fire safety regulations) and the absence of regulatory obligations on renewable energies in the local building codes are the biggest weaknesses. The structural and functional analysis is followed by a coupled structural-functional analysis. This assessment will help identify weaknesses and strengths and recommend strategies that will enable the growth of BIPV from a niche market to a major market segment. The aim is for photovoltaics (PV) on buildings to be primarily designed as Building Integrated Photovoltaics (BIPV) to reduce additional costs. This, combined with the avoided costs for other components of the building, should result in cost parity with Building-Applied Photovoltaics (BAPV). It is also crucial to encourage all manufacturers of building envelope components to ensure that their products offer the dual benefit of serving as building components while also generating electricity. By doing so, such products can become standard in the industry. The transition from BAPV to BIPV was already analyzed in a 2015 BIPV brochure [2] from the Austrian Photovoltaics Technology Platform (TPPV), which discussed the advantages of an integrated solution versus an attached solution and outlined the necessary steps to make BIPV the standard for building PV. The recommendations are summarized as follows: i) It is important to involve (BI)PV in the early stages of the building planning process. ii) successful implementation projects must be made public through various channels to increase knowledge about BIPV technology and its possibilities (e.g., lighthouse projects in public buildings). iii) PV standards and construction codes have to be harmonized. iv) The Austrian government should stipulate the use of PV in the obligatory building specifications. v) Another recommendation would be to enact a law requiring every sealed area to be checked for dual use with (BI)PV. One positive development worth mentioning is the Climate Fund's Lighthouse call, which focuses specifically on integrated PV and offers higher grants for BIPV than the Renewable Expansion Act] , demonstrating increased interest and commitment to this technology. In addition, the TPPV Innovation Awards, which were awarded for the first time specifically for building-integrated PV and now include other topics of PV integration outside of buildings, are a sign that the industry is broadening its perspective and recognizing the importance of BIPV beyond traditional applications. These developments could help to further promote the acceptance and deployment of BIPV and drive innovation in this area. Nevertheless, it is important to consider the significantly higher costs of BIPV products, as well as the greatly increased planning effort that arises when PV becomes an integral building product.

Banco de la República is celebrating its 100th anniversary in 2023. This is a very significant anniversary and one that provides an opportunity to highlight the contribution the Bank has made to the country’s development. Its track record as guarantor of monetary stability has established it as the one independent state institution that generates the greatest confidence among Colombians due to its transparency, management capabilities, and effective compliance with the central banking and cultural responsibilities entrusted to it by the Constitution and the Law. On a date as important as this, the Board of Directors of Banco de la República (BDBR) pays tribute to the generations of governors and officers whose commitment and dedication have contributed to the growth of this institution.1 Banco de la República’s mandate was confirmed in the National Constitutional Assembly of 1991 where the citizens had the opportunity to elect the seventy people who would have the task of drafting a new constitution. The leaders of the three political movements with the most votes were elected as chairs to the Assembly, and this tripartite presidency reflected the plurality and the need for consensus among the different political groups to move the reform forward. Among the issues considered, the National Constitutional Assembly gave special importance to monetary stability. That is why they decided to include central banking and to provide Banco de la República with the necessary autonomy to use the instruments for which they are responsible without interference from other authorities. The constituent members understood that ensuring price stability is a state duty and that the entity responsible for this task must be enshrined in the Constitution and have the technical capability and institutional autonomy necessary to adopt the decisions they deem appropriate to achieve this fundamental objective in coordination with the general economic policy. In particular, Article 373 established that “the State, through Banco de la República, shall ensure the maintenance of the purchasing power of the currency,” a provision that coincided with the central banking system adopted by countries that have been successful in controlling inflation. In 1999, in Ruling 481, the Constitutional Court stated that “the duty to maintain the purchasing power of the currency applies to not only the monetary, credit, and exchange authority, i.e., the Board of Banco de la República, but also those who have responsibilities in the formulation and implementation of the general economic policy of the country” and that “the basic constitutional purpose of Banco de la República is the protection of a sound currency. However, this authority must take the other economic objectives of state intervention such as full employment into consideration in their decisions since these functions must be coordinated with the general economic policy.” The reforms to Banco de la República agreed upon in the Constitutional Assembly of 1991 and in Act 31/1992 can be summarized in the following aspects: i) the Bank was assigned a specific mandate: to maintain the purchasing power of the currency in coordination with the general economic policy; ii) the BDBR was designatedas the monetary, foreign exchange, and credit authority; iii) the Bank and its Board of Directors were granted a significant degree of independence from the government; iv) the Bank was prohibited from granting credit to the private sector except in the case of the financial sector; v) established that in order to grant credit to the government, the unanimous vote of its Board of Directors was required except in the case of open market transactions; vi) determined that the legislature may, in no case, order credit quotas in favor of the State or individuals; vii) Congress was appointed, on behalf of society, as the main addressee of the Bank’s reporting exercise; and viii) the responsibility for inspection, surveillance, and control over Banco de la República was delegated to the President of the Republic. The members of the National Constitutional Assembly clearly understood that the benefits of low and stable inflation extend to the whole of society and contribute mto the smooth functioning of the economic system. Among the most important of these is that low inflation promotes the efficient use of productive resources by allowing relative prices to better guide the allocation of resources since this promotes economic growth and increases the welfare of the population. Likewise, low inflation reduces uncertainty about the expected return on investment and future asset prices. This increases the confidence of economic agents, facilitates long-term financing, and stimulates investment. Since the low-income population is unable to protect itself from inflation by diversifying its assets, and a high proportion of its income is concentrated in the purchase of food and other basic goods that are generally the most affected by inflationary shocks, low inflation avoids arbitrary redistribution of income and wealth.2 Moreover, low inflation facilitates wage negotiations, creates a good labor climate, and reduces the volatility of employment levels. Finally, low inflation helps to make the tax system more transparent and equitable by avoiding the distortions that inflation introduces into the value of assets and income that make up the tax base. From the monetary authority’s point of view, one of the most relevant benefits of low inflation is the credibility that economic agents acquire in inflation targeting, which turns it into an effective nominal anchor on price levels. Upon receiving its mandate, and using its autonomy, Banco de la República began to announce specific annual inflation targets as of 1992. Although the proposed inflation targets were not met precisely during this first stage, a downward trend in inflation was achieved that took it from 32.4% in 1990 to 16.7% in 1998. At that time, the exchange rate was kept within a band. This limited the effectiveness of monetary policy, which simultaneously sought to meet an inflation target and an exchange rate target. The Asian crisis spread to emerging economies and significantly affected the Colombian economy. The exchange rate came under strong pressure to depreciate as access to foreign financing was cut off under conditions of a high foreign imbalance. This, together with the lack of exchange rate flexibility, prevented a countercyclical monetary policy and led to a 4.2% contraction in GDP that year. In this context of economic slowdown, annual inflation fell to 9.2% at the end of 1999, thus falling below the 15% target set for that year. This episode fully revealed how costly it could be, in terms of economic activity, to have inflation and exchange rate targets simultaneously. Towards the end of 1999, Banco de la República announced the adoption of a new monetary policy regime called the Inflation Targeting Plan. This regime, known internationally as ‘Inflation Targeting,’ has been gaining increasing acceptance in developed countries, having been adopted in 1991 by New Zealand, Canada, and England, among others, and has achieved significant advances in the management of inflation without incurring costs in terms of economic activity. In Latin America, Brazil and Chile also adopted it in 1999. In the case of Colombia, the last remaining requirement to be fulfilled in order to adopt said policy was exchange rate flexibility. This was realized around September 1999, when the BDBR decided to abandon the exchange-rate bands to allow the exchange rate to be freely determined in the market.Consistent with the constitutional mandate, the fundamental objective of this new policy approach was “the achievement of an inflation target that contributes to maintaining output growth around its potential.”3 This potential capacity was understood as the GDP growth that the economy can obtain if it fully utilizes its productive resources. To meet this objective, monetary policy must of necessity play a countercyclical role in the economy. This is because when economic activity is below its potential and there are idle resources, the monetary authority can reduce the interest rate in the absence of inflationary pressure to stimulate the economy and, when output exceeds its potential capacity, raise it. This policy principle, which is immersed in the models for guiding the monetary policy stance, makes the following two objectives fully compatible in the medium term: meeting the inflation target and achieving a level of economic activity that is consistent with its productive capacity. To achieve this purpose, the inflation targeting system uses the money market interest rate (at which the central bank supplies primary liquidity to commercial banks) as the primary policy instrument. This replaced the quantity of money as an intermediate monetary policy target that Banco de la República, like several other central banks, had used for a long time. In the case of Colombia, the objective of the new monetary policy approach implied, in practical terms, that the recovery of the economy after the 1999 contraction should be achieved while complying with the decreasing inflation targets established by the BDBR. The accomplishment of this purpose was remarkable. In the first half of the first decade of the 2000s, economic activity recovered significantly and reached a growth rate of 6.8% in 2006. Meanwhile, inflation gradually declined in line with inflation targets. That was how the inflation rate went from 9.2% in 1999 to 4.5% in 2006, thus meeting the inflation target established for that year while GDP reached its potential level. After this balance was achieved in 2006, inflation rebounded to 5.7% in 2007, above the 4.0% target for that year due to the fact that the 7.5% GDP growth exceeded the potential capacity of the economy.4 After proving the effectiveness of the inflation targeting system in its first years of operation, this policy regime continued to consolidate as the BDBR and the technical staff gained experience in its management and state-of-the-art economic models were incorporated to diagnose the present and future state of the economy and to assess the persistence of inflation deviations and expectations with respect to the inflation target. Beginning in 2010, the BDBR established the long-term 3.0% annual inflation target, which remains in effect today. Lower inflation has contributed to making the macroeconomic environment more stable, and this has favored sustained economic growth, financial stability, capital market development, and the functioning of payment systems. As a result, reductions in the inflationary risk premia and lower TES and credit interest rates were achieved. At the same time, the duration of public domestic debt increased significantly going from 2.27 years in December 2002 to 5.86 years in December 2022, and financial deepening, measured as the level of the portfolio as a percentage of GDP, went from around 20% in the mid-1990s to values above 45% in recent years in a healthy context for credit institutions.Having been granted autonomy by the Constitution to fulfill the mandate of preserving the purchasing power of the currency, the tangible achievements made by Banco de la República in managing inflation together with the significant benefits derived from the process of bringing inflation to its long-term target, make the BDBR’s current challenge to return inflation to the 3.0% target even more demanding and pressing. As is well known, starting in 2021, and especially in 2022, inflation in Colombia once again became a serious economic problem with high welfare costs. The inflationary phenomenon has not been exclusive to Colombia and many other developed and emerging countries have seen their inflation rates move away from the targets proposed by their central banks.5 The reasons for this phenomenon have been analyzed in recent Reports to Congress, and this new edition delves deeper into the subject with updated information. The solid institutional and technical base that supports the inflation targeting approach under which the monetary policy strategy operates gives the BDBR the necessary elements to face this difficult challenge with confidence. In this regard, the BDBR reiterated its commitment to the 3.0% inflation target in its November 25 communiqué and expects it to be reached by the end of 2024.6 Monetary policy will continue to focus on meeting this objective while ensuring the sustainability of economic activity, as mandated by the Constitution. Analyst surveys done in March showed a significant increase (from 32.3% in January to 48.5% in March) in the percentage of responses placing inflation expectations two years or more ahead in a range between 3.0% and 4.0%. This is a clear indication of the recovery of credibility in the medium-term inflation target and is consistent with the BDBR’s announcement made in November 2022. The moderation of the upward trend in inflation seen in January, and especially in February, will help to reinforce this revision of inflation expectations and will help to meet the proposed targets. After reaching 5.6% at the end of 2021, inflation maintained an upward trend throughout 2022 due to inflationary pressures from both external sources, associated with the aftermath of the pandemic and the consequences of the war in Ukraine, and domestic sources, resulting from: strengthening of local demand; price indexation processes stimulated by the increase in inflation expectations; the impact on food production caused by the mid-2021 strike; and the pass-through of depreciation to prices. The 10% increase in the minimum wage in 2021 and the 16% increase in 2022, both of which exceeded the actual inflation and the increase in productivity, accentuated the indexation processes by establishing a high nominal adjustment benchmark. Thus, total inflation went to 13.1% by the end of 2022. The annual change in food prices, which went from 17.2% to 27.8% between those two years, was the most influential factor in the surge in the Consumer Price Index (CPI). Another segment that contributed significantly to price increases was regulated products, which saw the annual change go from 7.1% in December 2021 to 11.8% by the end of 2022. The measure of core inflation excluding food and regulated items, in turn, went from 2.5% to 9.5% between the end of 2021 and the end of 2022. The substantial increase in core inflation shows that inflationary pressure has spread to most of the items in the household basket, which is characteristic of inflationary processes with generalized price indexation as is the case in Colombia. Monetary policy began to react early to this inflationary pressure. Thus, starting with its September 2021 session, the BDBR began a progressive change in the monetary policy stance moving away from the historical low of a 1.75% policy rate that had intended to stimulate the recovery of the economy. This adjustment process continued without interruption throughout 2022 and into the beginning of 2023 when the monetary policy rate reached 12.75% last January, thus accumulating an increase of 11 percentage points (pp). The public and the markets have been surprised that inflation continued to rise despite significant interest rate increases. However, as the BDBR has explained in its various communiqués, monetary policy works with a lag. Just as in 2022 economic activity recovered to a level above the pre-pandemic level, driven, along with other factors, by the monetary stimulus granted during the pandemic period and subsequent months, so too the effects of the current restrictive monetary policy will gradually take effect. This will allow us to expect the inflation rate to converge to 3.0% by the end of 2024 as is the BDBR’s purpose.Inflation results for January and February of this year showed declining marginal increases (13 bp and 3 bp respectively) compared to the change seen in December (59 bp). This suggests that a turning point in the inflation trend is approaching. In other Latin American countries such as Chile, Brazil, Perú, and Mexico, inflation has peaked and has begun to decline slowly, albeit with some ups and downs. It is to be expected that a similar process will take place in Colombia in the coming months. The expected decline in inflation in 2023 will be due, along with other factors, to lower cost pressure from abroad as a result of the gradual normalization of supply chains, the overcoming of supply shocks caused by the weather, and road blockades in previous years. This will be reflected in lower adjustments in food prices, as has already been seen in the first two months of the year and, of course, the lagged effect of monetary policy. The process of inflation convergence to the target will be gradual and will extend beyond 2023. This process will be facilitated if devaluation pressure is reversed. To this end, it is essential to continue consolidating fiscal sustainability and avoid messages on different public policy fronts that generate uncertainty and distrust. 1 This Report to Congress includes Box 1, which summarizes the trajectory of Banco de la República over the past 100 years. In addition, under the Bank’s auspices, several books that delve into various aspects of the history of this institution have been published in recent years. See, for example: Historia del Banco de la República 1923-2015; Tres banqueros centrales; Junta Directiva del Banco de la República: grandes episodios en 30 años de historia; Banco de la República: 90 años de la banca central en Colombia. 2 This is why lower inflation has been reflected in a reduction of income inequality as measured by the Gini coefficient that went from 58.7 in 1998 to 51.3 in the year prior to the pandemic. 3 See Gómez Javier, Uribe José Darío, Vargas Hernando (2002). “The Implementation of Inflation Targeting in Colombia”. Borradores de Economía, No. 202, March, available at: https://repositorio.banrep.gov.co/handle/20.500.12134/5220 4 See López-Enciso Enrique A.; Vargas-Herrera Hernando and Rodríguez-Niño Norberto (2016). “The inflation targeting strategy in Colombia. An historical view.” Borradores de Economía, No. 952. https://repositorio.banrep.gov.co/handle/20.500.12134/6263 5 According to the IMF, the percentage change in consumer prices between 2021 and 2022 went from 3.1% to 7.3% for advanced economies, and from 5.9% to 9.9% for emerging market and developing economies. 6 https://www.banrep.gov.co/es/noticias/junta-directiva-banco-republica-reitera-meta-inflacion-3