Publications

2016
Gerarden T, Reeder WS, Stock JH. Federal Coal Program Reform, the Clean Power Plan, and the Interaction of Upstream and Downstream Climate Policies. NBER WP 22214. 2016.Abstract

Coal mined on federally managed lands accounts for approximately 40% of U.S. coal consumption and 13% of total U.S. energy-related CO2 emissions. The U.S. Department of the Interior is undertaking a programmatic review of federal coal leasing, including the climate effects of burning federal coal. This paper studies the interaction between a specific upstream policy, incorporating a carbon adder into federal coal royalties, and downstream emissions regulation under the Clean Power Plan (CPP). After providing some comparative statics, we
present quantitative results from a detailed dynamic model of the power sector, the Integrated Planning Model (IPM). The IPM analysis indicates that, in the absence of the CPP, a royalty adder equal to the social cost of carbon could reduce emissions by roughly ¾ of the emissions reduction that the CPP is projected to achieve. If instead the CPP is binding, the royalty adder would: reduce the price of tradeable emissions allowances, produce some additional emissions reductions by reducing leakage, and reduce wholesale power prices under a mass-based CPP but increase them under a rate-based CPP. A federal royalty adder increases mining of non-federal coal, but this substitution is limited by a shift to electricity generation by gas and renewables.

Key words: extraction royalties, social cost of carbon
JEL codes: Q54, Q58, Q38

PDF
Stock JH, Watson MW. Factor Models and Structural Vector Autoregressions in Macroeconomics. 2016. stock_watson_dfm_hom_030916.pdf
2014
Stock JH. Discussion of "Labor Force Participation: Recent Developments and Future Prospects" by Stephanie Aaronson et al. Brookings Papers on Economic Activity. 2014 :261-271. labor_force_participation_discussion.pdf
Mavroeidis S, Plagborg-Moller M, Stock JH. Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve. Journal of Economics Literature. 2014;52 (1) :124-188. empirical_evidence_on_inflation.pdf
Stock JH, Watson MW. Estimating Turning Points Using Large Data Sets. Journal of Econometrics. 2014;178 :368-381. estimating_turning_points.pdf
2013
Stock JH. Discussion of "Unseasonal Seasonals?" by Jonathan Wright. Brookings Papers on Economic Activity. 2013 :111-119. unseasonal_seasonals_discussion.pdf
Kaufmann R, Kauppi H, Mann M, Stock JH. Does Temperature Contain a Stochastic Trend: Linking Statistical Results to Physical Mechanisms. Climatic Change. 2013;118 (3-4) :729-743. PDF
Bates B, Plagborg-Moller M, Stock JH, Watson MW. Consistent Factor Estimation in Dynamic Factor Models with Structural Instability. Journal of Econometrics. 2013;177 :289-304. PDF
2012
Montiel Olea JL, Stock J, Watson MW. Inference in Structural VARs with External Instruments. 2012. Presentation Slides
Stock J, Watson M. Generalized Shrinkage Methods for Forecasting Using Many Predictors. Journal of Business & Economic Statistics. 2012;30 (4) :481-493. PDF
Stella A, Stock J. A State-Dependent Model for Inflation Forecasting. 2012. PDF
Stock J, Watson M. Disentangling the Channels of the 2007-2009 Recession. Brookings Papers on Economic Activity. 2012;Spring 2012 :81-135. PDF
2011
Stock J, Watson M. Dynamic Factor Models. In: Clements MJ, Hendry DF Oxford Handbook on Economic Forecasting. Oxford: Oxford University Press ; 2011. PDF
Stock J. Discussion of Fuhrer, "The Role of Expectations in Inflation Dynamics". 2011. PDF Replication File
Introduction to Econometrics (3rd edition)
Stock J, Watson M. Introduction to Econometrics (3rd edition). Addison Wesley Longman; 2011.