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Hayek and the Texas blackout

Stephen Littlechild and Lynne Kiesling

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Was the Texas blackout a market failure or regulatory failure? The economist Hayek has been adduced in support of both views. Hayek would have approved the competitive Texas system, including ERCOT. His likely view on the scarcity pricing framework is less clear, and the recent regulatory implementation of the "circuit breaker" was problematic. There is now a need to revise the scarcity pricing framework in the light of recent events, and to reflect ever-changing market conditions.

Keywords: Hayek; Texas blackout; scarcity pricing; retail electricity competition (search for similar items in EconPapers)
JEL-codes: D47 D82 K23 L51 L94 (search for similar items in EconPapers)
Date: 2021-06-24
New Economics Papers: this item is included in nep-com, nep-ene, nep-hpe and nep-law
Note: sl304
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