Machine Learning

When electricity markets were deregulated across many U.S. states in the 1990s, economists and policymakers hoped competition would lower consumer prices. But for decades, the results remained ambiguous—until now. A new paper, Causality analysis of electricity market liberalization on electricity price using novel Machine Learning methods, offers the most precise evaluation yet. Using cutting-edge causal machine learning models, the authors demonstrate that liberalization led to a 7% decrease in residential electricity prices in the short term—a finding with major implications for regulatory policy and infrastructure reform. ...

Classic finance assumes that the past doesn’t matter — only the present state of the market matters for decisions. But in a new paper from researchers at Imperial College and Oxford, a kernel-based framework for trading strategy design exposes how this assumption leads to suboptimal choices. Their insight: memory matters, and modern tools can finally make use of it. ...