Research Paper (postgraduate) from the year 2007 in the subject Business economics - Economic and Social History, grade: 1,0, University of Massachusetts - Amherst (Department of Economics), course: European Economic History, 64 entries in the bibliography, language: English, abstract: This paper provides an analysis of the German chemical industry during the "Second Industrial Revolution" of the late 19th and the early 20th century. It is modeled after Steven Webb's (1980) article on the iron and steel industry. Here it is argued that the exceptional growth and success of the industry - chemicals were the fastest growing industry in Germany and by 1890 German firms held 85% world market share in dyestuff production - was supported by a high degree of market con-centration and cartelization. This enabled the firms to gain large economies of scale and scope through backward integra-tion and product diversification. Dynamic efficiency gains were mainly achieved by relaxing credit constraints, reducing uncertainty, and allocate investment more efficiently. It is further argued that state action played a crucial role in setting up and stabilizing cartels. This analysis is in line with a Schumpeterian view of welfare-enhancing effects of imperfect competi-tion. While these findings obviously do not question anti-trust policy per se, they do question a mechanical view on market structure that is common in much mainstream economic thinking.

Energy and climate policies are usually seen as measures to internalize externalities. However, as a side effect, these policies redistribute wealth between consumers and producers, and within these groups. While redistribution is seldom the focus of the academic literature in energy economics, it plays a central role in real world policy debates. This paper compares the redistribution effects of two major electricity policies: support schemes for renewable energy sources, and CO2 pricing. We find that the redistribution effects of both policies are large, and they work in opposed directions: while renewables support transfers wealth from producers to consumers, carbon pricing does the opposite. More specifically, we show that moderate amounts of wind subsidies leave consumers better off even if they bear the costs of subsidies. In the case of CO2 pricing, we find that while suppliers as a whole benefit even without free allocation of emission certificates, large amounts of producer surplus are redistributed between different types of producers. These findings are derived from an analytical model of electricity markets, and a calibrated numerical model of the Northwestern European integrated power system. Our findings imply that a society with a preference for avoiding large redistribution might prefer a mix of policies, even if CO2 pricing alone is the first best climate policy in terms of allocative efficiency.