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I think that you're right that photovoltaic solar is sui generis, one of a kind, in that it lacks the type of backward linkages that wind does.  So I suppose that it makes sense that they find that the multiplier effect of state aid is lower in in pv solar than wind. The baseline is lower so the "boost" is going to be less impressive in absolute terms.

That said, I dislike that they talk about solar cells but not concentrating solar power, where there are lots of backward linkages to metal and glassworking. What I do see is that these guys take a network view of the economy which at at odds with the atomized view that neo-liberalism gives.  

There's some sort of madness in the fact that neo-liberals tend to view that economic actors are homogenous and interchangeable, i.e. if all the automakers and their suppliers fail some other firm will go into that field.  It's just so analysis.

I've been thinking of how this relates to Durkheim and the division of labor recently.  The idea there is that it's the differences that keep the economy rolling.  The butcher cuts meat, the baker makes bread, and the candlestick maker gets us our candlesticks. They specialize because that is what they are best at. It's this specialization and the development of specialized equipment and skills that leads to efficiency.  

How does that square with the atomized view of the economy that neoliberals push? If the butcher goes out of business and the candlestick maker decides to try to step into that business they just aren't going to be as effective. I can't put my finger on it, or communicate it clearly, but there's a real paradox here.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue May 31st, 2011 at 01:43:40 PM EST
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No time for a proper response, but I agree totally with your general thrust.
by Metatone (metatone [a|t] gmail (dot) com) on Tue May 31st, 2011 at 02:25:03 PM EST
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That's what the assumption of negligible bankruptcy costs does to your model. If you construct a model with non-negligible bankruptcy costs and margin calls, then you get some interesting cascade effects. But since that's not an equilibrium model, it by definition cannot be Serious.

Negligible bankruptcy costs was not necessarily a completely insane assumption in Walras' time. But in today's capital-intensive production it most certainly is.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 31st, 2011 at 03:08:05 PM EST
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