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This paper proposes and analyses the Kullback-Leibler information criterion (KLIC) as a unified statistical tool to evaluate, compare and combine density forecasts. Use of the KLIC is particularly attractive, as well as operationally convenient, given its equivalence with the widely used Berkowitz likelihood ratio test for the evaluation of individual density forecasts that exploits the probability integral transforms. Parallels with the comparison and combination of point forecasts are made. This and related Monte Carlo experiments help draw out properties of combined density forecasts. We illustrate the uses of the KLIC in an application to two widely used published density forecasts for UK inflation, namely the Bank of England and NIESR 'fan' charts.

This paper addresses the problem of testing for the presence of a stochastic bubble in a time series in the case that the bubble is periodically collapsing so that the asset price keeps returning to the level implied by the market fundamentals. As this is essentially a problem of identifying the collapsing periods from the expanding ones, we propose using a generalization of the Dickey–Fuller test procedure which makes use of the class of Markov regime‐switching models. The potential of the new methodology is illustrated via simulation, and an empirical example is given. Copyright © 1999 John Wiley & Sons, Ltd.

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We discuss the origins of the Greek financial crisis as manifested in the growing fiscal and current-account deficits since euro-area entry in 2001. We then provide an investigation of spreads on Greek relative to German long-term government debt. Using monthly data over the period 2000 to 2010, we estimate a cointegrating relationship between spreads and their long-term fundamental determinants, and compare the spreads predicted by this estimated relationship with actual spreads. We find periods of both undershooting and overshooting of spreads compared to what is predicted by the economic fundamentals. JEL Classification: E63; G12

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The California Independent System Operator (CAISO), First Solar, and the National Renewable Energy Laboratory (NREL) conducted a demonstration project on a large utility-scale photovoltaic (PV) power plant in California to test its ability to provide essential ancillary services to the electric grid. With increasing shares of solar-and wind-generated energy on the electric grid, traditional generation resources equipped with automatic governor control (AGC) and automatic voltage regulation controls-specifically, fossil thermal-are being displaced. The deployment of utility-scale, grid-friendly PV power plants that incorporate advanced capabilities to support grid stability and reliability is essential for the large-scale integration of PV generation into the electric power grid, among other technical requirements.A typical PV power plant consists of multiple power electronic inverters and can contribute to grid stability and reliability through sophisticated "grid-friendly" controls. In this way, PV power plants can be used to mitigate the impact of variability on the grid, a role typically reserved for conventional generators. In August 2016, testing was completed on First Solar's 300-MW PV power plant, and a large amount of test data was produced and analyzed that demonstrates the ability of PV power plants to use grid-friendly controls to provide essential reliability services. These data showed how the development of advanced power controls can enable PV to become a provider of a wide range of grid services, including spinning reserves, load following, voltage support, ramping, frequency response, variability smoothing, and frequency regulation to power quality. Specifically, the tests conducted included various forms of active power control such as AGC and frequency regulation; droop response; and reactive power, voltage, and power factor controls.This project demonstrated that advanced power electronics and solar generation can be controlled to contribute to system-wide reliability. It was shown that the First Solar plant can provide essential reliability services related to different forms of active and reactive power controls, including plant participation in AGC, primary frequency control, ramp rate control, and voltage regulation. For AGC participation in particular, by comparing the PV plant testing results to the typical performance of individual conventional technologies, we showed that regulation accuracy by the PV plant is 24-30 points better than fast gas turbine technologies. The plant's ability to provide volt-ampere reactive control during periods of extremely low power generation was demonstrated as well.The project team developed a pioneering demonstration concept and test plan to show how various types of active and reactive power controls can leverage PV generation's value from being a simple variable energy resource to a resource that provides a wide range of ancillary services. With this project's approach to a holistic demonstration on an actual, large, utilityscale, operational PV power...