In their editorial “Perfect storm or imperfect supply chain? The U.S. supply chain crisis”, Monument’s Dr. Paul Kent and co-author Dr. Hercules Haralambides examine the current supply chain problems and their possible remedies. The surge in e-commerce has exposed weaknesses with the just-in-time logistics paradigm where maximizing capacity utilization is viewed as being efficient; as a result, logistics asset owners strive to minimize slack capacity, even going beyond industry maximum utilization standards, thereby creating supply chain bottlenecks. In addition to problems with slack capacity, the authors identify other issues related to dominant market players, including liner shipping alliances and international chassis service providers.
The authors outline recommendations that address a seeming lack of preparedness for disruptions, capacity management issues, and weaknesses in regulation. The open-source editorial can be accessed using the below link via the Maritime Economics and Logistics.
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In an Expert Analysis published in Law360, Mark Kaplan, CFA offers his thoughts on the role economic analysis might play in SEC enforcement of climate-related matters. In the article, he first summarizes the SEC’s ongoing development of climate risk disclosure rules and the SEC’s focus on identifying climate risk disclosure gaps and misstatements. He then provides a brief overview of SEC economic analysis of corporate misstatements. Finally, he discusses several potential economic risks to corporations as climate risk disclosure enforcement likely increases in the future, providing examples of how the SEC might assess economic benefits to a corporation from material gaps or misstatements in climate risk disclosures.
Law360 published a piece co-authored by Jamie Donovan and Kenneth Grant of Berkeley Research Group exploring the rising tensions between states’ climate policies and investment treaty duties.
They note the absolute need for states, investors, and tribunals to comprehend the evolving economics of power generation and the opportunity to allow states more flexibility in climate policy.
Jessica Harris and former colleague David Slovick, partner at Barnes & Thornburg LLP, share their thoughts on Senator Elizabeth Warren’s idea for the CFTC to oversee digital ad exchanges. They discuss if digital advertising is, or should be, considered a commodity, and they explore the merits of the CFTC adding to their current jurisdiction.
Law360 published a piece by Monument Economics Group Affiliate Dr. Andrew Kleit and his colleague Todd Aagaard. This paper delves into the electricity prices charged during the peak of the power shortage and subsequent 32 hours post-peak during the Texas Power Crisis of February 2021. Numerous lawsuits have been filed alleging that power generators now owe staggering amounts to electricity suppliers. The authors delve into the pricing factors and how the operating reserve demand curve particularly plays a pivotal role in determining what prices should have been absent the Texas Public Utility Commission interference.
A controversial issue argued Tuesday before the U.S. Supreme Court was whether the Second Circuit should have given complete deference to a declaration that price-fixing by two vitamin C manufacturers was required by Chinese law. When a foreign government’s regulation is exempt, measuring damages attributable only to the cartel respects international comity while also recognizing how foreign cartels can harm U.S. customers, say economists of Monument Economics Group.