Working Paper
Corporate average fuel economy standards and the market for new vehicles
Klier, Thomas H.; Linn, Joshua (2011)
This paper presents an overview of the economics literature on the effect of Corporate Average Fuel Economy (CAFE) standards on the new vehicle market. Since 1978, CAFE has imposed fuel economy standards for cars and light trucks sold in the U.S. market. This paper reviews the history of the standards, followed by a discussion of the major upcoming changes in implementation and stringency. It describes strategies that firms can use to meet the standards and reviews the CAFE literature as it applies to the new vehicle market. The paper concludes by highlighting areas for future research in ...
Working Paper Series , Paper WP-2011-01

Working Paper
New vehicle characteristics and the cost of the corporate average fuel economy standard
Klier, Thomas H.; Linn, Joshua (2008)
Recent legislation has increased the Corporate Average Fuel Economy (CAF) standard by 40 percent, which represents the first major increase in the standard since its creation in 1975. Previous analysis of the CAF standard has focused on the short run effects, in which vehicle characteristics are held fixed, or the long run, when firms can adopt new powertrain technology. This paper focuses on the medium run, when firms can choose characteristics such as weight and power, and have a limited ability to adopt engine technology. We first document the historical importance of the medium run and ...
Working Paper Series , Paper WP-08-13

Newsletter
Raising automotive fuel efficiency
Klier, Thomas H.; Foster, Taft (2009-09)
The Obama administration recently moved up the schedule for achieving the fuel efficiency standards set forth by Congress in the 2007 Energy Independence and Security Act. The deadline for meeting these standards is now vehicle model year 2016 instead of 2020.
Chicago Fed Letter , Issue Sep

Working Paper
What Fuels the Volatility of Electricity Prices?
Saretto, Alessio; Shcherbakova, Anastasia; Lin, Jeremy (2024-10-15)
We use emergency outages of coal generators as an exogenous source of variation in the power generation stack to study how changes in marginal fuel affect real-time prices. Contrary to anecdotal evidence, we find that wholesale prices are less volatile when natural gas is on the margin more often.
Working Papers , Paper 2408