New Economics Papers
on Computational Economics
Issue of 2005‒06‒27
seven papers chosen by

  1. A Note on Parallelizing the Parameterized Expectations Algorithm By Michael Creel
  2. Cognitive maps in spatial economics: A multidisciplinary approach By Nathalie GAUSSIER (IERSO, IFReDE-GRES); Philippe LAROQUE ETIS neurocybernetics team (UMR CNRS 8051); Nicolas CUPERLIER ETIS neurocybernetics team (UMR CNRS 8051); Mathias QUOY ETIS neurocybernetics team (UMR CNRS 8051); Sorin MOGA ENST Brest; Philippe GAUSSIER ETIS neurocybernetics team (UMR CNRS 8051)
  3. Policy Coordination in East Asia and across the Pacific By Koichiro Kamada; Izumi Takagawa
  4. Calibration and Validation of SWAT for the Upper Maquoketa River Watershed By Reungsang, Pipat; Kanwar, Ramesh S.; Jha, Manoj; Gassman, Philip W.; Ahmad, Khalil; Saleh, Ali
  5. Are Durable Goods Consumers Forward Looking? Evidence from College Textbooks By Judith Chevalier; Austan Goolsbee
  6. Dating Business Cycle Turning Points By Marcelle Chauvet; James D. Hamilton
  7. Capital account Liberalization and exchange rate regime choice, What Scope for flexibility in Tunisia ? By Ben Ali Mohamed Sami

  1. By: Michael Creel
    Abstract: The parameterized expectations algorithm (PEA) involves a long simulation and a nonlinear least squares (NLS) fit, both embedded in a loop. Both steps are natural candidates for parallelization. This note shows that parallelization can lead to important speedups for the PEA. I provide example code for a simple model that can serve as a template for parallelization of more interesting models, as well as a download link for an image of a bootable CD that allows creation of a cluster and execution of the example code in minutes, with no need to install any software.
    Keywords: parameterized expectations, parallel computing
    JEL: E27 C63 C88
    Date: 2005–06–15
  2. By: Nathalie GAUSSIER (IERSO, IFReDE-GRES); Philippe LAROQUE ETIS neurocybernetics team (UMR CNRS 8051); Nicolas CUPERLIER ETIS neurocybernetics team (UMR CNRS 8051); Mathias QUOY ETIS neurocybernetics team (UMR CNRS 8051); Sorin MOGA ENST Brest; Philippe GAUSSIER ETIS neurocybernetics team (UMR CNRS 8051)
    Abstract: If mental maps are a well-known subject in spatial analysis, they suffer from the difficulties to make them an operational concept. Nowadays, the development of cognitive science opens up new perspectives. Thanks to an association of spatial economists, roboticists and computer scientists in the context of a CNRS project “Geomatics, Space, Territories and Mobilities”, we show that it is possible to simulate cognitive maps that fit both with non-metric and situated properties. The paper works on a common assumption that space is central to understand individual strategies. It puts forward the idea that spatial visual information is central to spatial situated action. As a consequence, cognitive maps are built with endogenous preferences and exhibit interesting characteristics to better comprehend situated rationality. As an example, we show that a cognitive agent that means agent with a cognitive map, is able to solve spatial compromise without optimising any a priori known resources on a geographic map.
    Keywords: Cognitive maps; neural networks; learning; economics issues; multidisciplinary system
    JEL: D00 R10
    Date: 2005
  3. By: Koichiro Kamada; Izumi Takagawa
    Abstract: In this paper, we construct a macro-econometric model that describes the economic activity in the Asia-Pacific area and provide quantitative insights into the recent policy debates on monetary and currency coordination among the East Asian economies. The model includes a wide variety of monetary and currency policy rules that the East Asian economies adopt and allows for one country's policymaking to have substantial effects on foreign countries. We apply the model to three current policy issues: (1) the desirability of currency basket pegs in East Asia, (2) the anticipated effects of China's currency policy reform, and (3) the non-negativity constraint on Japanese nominal interest rates. The simulation analyses show the external economy effects of policy rules quantitatively and suggest the difficulty of monetary and currency policy coordination among the East Asian economies.
    Date: 2005–06
  4. By: Reungsang, Pipat; Kanwar, Ramesh S.; Jha, Manoj; Gassman, Philip W.; Ahmad, Khalil; Saleh, Ali
    Abstract: A validation study has been performed using the Soil and Water Assessment Tool (SWAT) model with data collected for the Upper Maquoketa River Watershed (UMRW), which drains over 16,000 ha in northeast Iowa. This validation assessment builds on a previous study with nested modeling for the UMRW that required both the Agricultural Policy EXtender (APEX) model and SWAT. In the nested modeling approach, edge-of-field flows and pollutant load estimates were generated for manure application fields with APEX and were then subsequently routed to the watershed outlet in SWAT, along with flows and pollutant loadings estimated for the rest of the watershed routed to the watershed outlet. In the current study, the entire UMRW cropland area was simulated in SWAT, which required translating the APEX subareas into SWAT hydrologic response units (HRUs). Calibration and validation of the SWAT output was performed by comparing predicted flow and NO3-N loadings with corresponding in-stream measurements at the watershed outlet from 1999 to 2001. Annual stream flows measured at the watershed outlet were greatly under-predicted when precipitation data collected within the watershed during the 1999-2001 period were used to drive SWAT. Selection of alternative climate data resulted in greatly improved average annual stream predictions, and also relatively strong r2 values of 0.73 and 0.72 for the predicted average monthly flows and NO3-N loads, respectively. The impact of alternative precipitation data shows that as average annual precipitation increases 19%, the relative change in average annual streamflow is about 55%. In summary, the results of this study show that SWAT can replicate measured trends for this watershed and that climate inputs are very important for validating SWAT and other water quality models.
    Date: 2005–06–22
  5. By: Judith Chevalier; Austan Goolsbee
    Abstract: Popular wisdom holds that publishers revise college textbooks mainly to kill off the secondary market for used books. While this behavior might be profitable if consumers are myopic, uninformed or have high short-run discount rates (that exceed the publishers'), neoclassical authors have noted that it will typically not be profitable if publishers can precommit not to cut prices and if consumers are forward-looking and have similar discount rates as the publishers; the consumer's willingness to pay for new books falls if they know that they cannot resell their used books. Using a large new dataset on all textbooks sold in psychology, biology and economics in the 10 semesters from 1997 to 2001, we estimate a demand system for books to test whether textbook consumers are forward-looking. The data strongly support the view that students are forward-looking with low short-run discount rates and that they have rational expectations of publishers' revision behavior. When the students buy their textbooks, they correctly take into account the probability that they will not be able to resell their books at the end of the semester due to a new edition release. Conditional on faculty assignment behavior, simulation results suggest that students are sufficiently forward-looking that publishers could not raise revenues by accelerating current revision cycles.
    JEL: L2 L6 D9
    Date: 2005–06
  6. By: Marcelle Chauvet; James D. Hamilton
    Abstract: This paper discusses formal quantitative algorithms that can be used to identify business cycle turning points. An intuitive, graphical derivation of these algorithms is presented along with a description of how they can be implemented making very minimal distributional assumptions. We also provide the intuition and detailed description of these algorithms for both simple parametric univariate inference as well as latent-variable multiple-indicator inference using a state-space Markov-switching approach. We illustrate the promise of this approach by reconstructing the inferences that would have been generated if parameters had to be estimated and inferences drawn based on data as they were originally released at each historical date. Waiting until one extra quarter of GDP growth is reported or one extra month of the monthly indicators released before making a call of a business cycle turning point helps reduce the risk of misclassification. We introduce two new measures for dating business cycle turning points, which we call the %u201Cquarterly real-time GDP-based recession probability index%u201D and the %u201Cmonthly real-time multiple-indicator recession probability index%u201D that incorporate these principles. Both indexes perform quite well in simulation with real-time data bases. We also discuss some of the potential complicating factors one might want to consider for such an analysis, such as the reduced volatility of output growth rates since 1984 and the changing cyclical behavior of employment. Although such refinements can improve the inference, we nevertheless find that the simpler specifications perform very well historically and may be more robust for recognizing future business cycle turning points of unknown character.
    JEL: E32
    Date: 2005–06
  7. By: Ben Ali Mohamed Sami (CADRE, Université de Lille, France)
    Abstract: Capital account liberalization and exchange rate regime choice, what scope for flexibility in Tunisia? The adoption by Tunisia of structural reforms of its economy in a context of gradual opening since 1986, had allowed the instauration in January 1993 of the convertibility of its current account. The total convertibility of the Tunisian Dinar remains a top priority in the immediate future like finality of a more close integration of the Tunisian economy to the world economy. The capital account liberalization in Tunisia poses the problematic of the prospective choice of its appropriate exchange rate regime. This study evaluates within a game-theoretic framework the exchange rate regime from a welfare perspective. In a tradable-nontradable goods model framework, Tunisia’s exchange rate regime choice is cast in terms of strategic interactions between the monetary authority and domestic enterprises. The monetary authority is assumed to choose an optimal exchange rate regime according to a welfare-related criterion by minimising a loss function defined in terms of external competitiveness and domestic inflation. Simulations outcomes reveal that capital account liberalization in the Tunisian economic context is compatible with a flexible exchange rate regime.
    JEL: C7 D8
    Date: 2005–06–15

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