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U.S. liquefied natural gas (LNG) export projects have substantially more spot trading of LNG than traditional projects. While this reduces the debt capacity of the projects, it allows project developers to better exploit many types of real options. Exploiting those options greatly increases the positive skewness of project cash flows. While the modal operating profits for a representative U.S. LNG export project are unlikely to cover fixed costs, interest and taxes at usual leverage ratios, the mean real equity return is likely to be positive. Some quarters could return extremely high profits. Understanding determinants of spot trading of LNG matters because increased spot trading will better integrate global natural gas markets. Keywords: LNG exports, Real options, Debt finance, Spot and contract trade, Market integration, 1. INTRODUCTION Compared to previous liquefaction developments, recent U.S. liquefied natural gas (LNG) export projects have more of their output exposed to spot trades. For example, data from the International [...]

We use generalized method of moments to estimate a rational expectations aggregate demand/aggregate supply macroeconomic model for five European economies and the United States. Our aim is to examine whether supply or demand shocks have predominated in these economies during the post-war era, and whether shocks of either type have been primarily temporary or permanent in nature. We find that permanent or temporary demand shocks have been the dominant source of variance in output growth in all six countries, but there is a less consistent pattern for inflation. Permanent supply shocks had the dominant influence on autocorrelations. JEL classification: E32; C32 Keywords: Generalized method of moments; Business cycles

An algorithm is developed for approximating the numerical solution to intertemporal optimization models characterized by multiple assets and inequality limitations. This method can promote a greater understanding of the first and second derivatives of the value function, risk aversion and asset demands. It is applied to a model of credit card debt demand.

A macroeconomic structural model of the American economy is presented and tested by a generalized method of moments approach. The model regards observable variables as intrinsic functions of a set of unobservable shocks or abrupt changes. Incomplete market information coupled with rational expectations is seen as a variable inherent in business cycles. Shocks associated with a growth in money, capital demand and portfolio composition are considered important sources of output fluctuations, inflation rate and interest rate changes.

We model the economically optimal dynamic oil production decisions for a stylized oilfield resembling the largest developed field in Saudi Arabia, Ghawar, paying particular attention to the engineering aspects of oil production. Specifically, we begin with a fluid dynamics model composed of differential equations describing the dynamics of fluid flow as a function of fluid pressure, formation characteristics, water injection, new wells, and how these parameters change as oil extraction occurs. We then link this physical description of the field to an intertemporal optimizing economic model. The cost and revenue functions are based on data from a number of sources. We use tensor splines to approximate the value function. The optimal solution depends on exogenous variables, such as the discount rate or the timing of breakthroughs in the cost of alternative energy sources, which are uncertain. We examine solutions under a number of scenarios to account for these uncertainties. [ABSTRACT FROM AUTHOR]