nep-cmp New Economics Papers
on Computational Economics
Issue of 2007‒05‒04
five papers chosen by
Stan Miles
Thompson Rivers University

  1. Electricity Reforms in Mali: A Macro–Micro Analysis of the Effects on Poverty and Distribution By Dorothée Boccanfuso; Antonio Estache; Luc Savard
  2. A smart market for passenger road transport (SMPRT) congestion: an application of computational mechanism design By Sheri Markose; Amadeo Alentorn; Deddy Koesrindartoto; Peter Allen; Phil Blythe; Sergio Grosso
  3. Can Regional Integration Accelerate Development in Africa? CGE Model Simulations of the Impact of the SADC FTA on the Republic of Madagascar By Jean-Jacques Hallaert
  4. Tax reform and labour-market performance in the euro area - a simulation-based analysis using the New Area-Wide Model By Günter Coenen; Peter McAdam; Roland Straub
  5. Marginal contribution, reciprocity and equity in segregated groups: Bounded rationality and self-organization in social networks By Alan Kirman; Sheri Markose; Simone Giasante; Paolo Pin

  1. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Antonio Estache (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: This paper uses a computable general equilibrium (CGE) microsimulation model to explore the distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country in West Africa. In the first part of the paper we analyze the distribution of electricity in Mali by income deciles, showing that few poor households are connected to the electricity grid. We then apply a sequential CGE microsimulation model to track the transmission mechanisms between increases in electricity prices and changes in poverty and inequality among different household groups. Our results show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects of such increases are quite strong and negative. The compensating policies we tested do not help those who lose from the pricing reform. In fact they amplify the negative effects
    Keywords: computable general equilibrium model, micro-simulation, poverty analysis, income distribution, privatization, water utilities
    JEL: D58 D31 I32 L33 L93
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:shr:wpaper:07-10&r=cmp
  2. By: Sheri Markose; Amadeo Alentorn; Deddy Koesrindartoto; Peter Allen; Phil Blythe; Sergio Grosso
    Abstract: To control and price negative externalities in passenger road transport, we develop an innovative and integrated computational agent based economics (ACE) model to simulate a market oriented "cap" and trade system. (i) First, there is a computational assessment of a digitized road network model of the real world congestion hot spot to determine the "cap" of the system in terms of vehicle volumes at which traffic efficiency deteriorates and the environmental externalities take off exponentially. (ii) Road users submit bids with the market clearing price at the fixed "cap" supply of travel slots in a given time slice (peak hour) being determined by an electronic sealed bid uniform price Dutch auction. (iii) Cross-sectional demand data on car users who traverse the cordon area is used to model and calibrate the heterogeneous bid submission behaviour in order to construct the inverse demand function and demand elasticities. (iv) The willingness to pay approach with heterogeneous value of time is contrasted with the generalized cost approach to pricing congestion with homogeneous value of travel time.
    Date: 2007–04–28
    URL: http://d.repec.org/n?u=RePEc:esx:essedp:630&r=cmp
  3. By: Jean-Jacques Hallaert
    Abstract: Madagascar plans to start phasing out its customs tariffs on imports from the Southern African Development Community in 2007. This paper uses a CGE model to evaluate the impact of the SADC FTA on Madagascar economy. The results suggest that the SADC FTA would only have a limited impact on Madagascar's real GDP because the liberalization affects only a small share of its total imports. However, Madagascar's trade and production pattern would change and benefit the textile and clothing sector. Removing rigidities in the labor and capital market would increase the gains but they would remain limited. Gains from the SADC FTA become substantial only when the regional liberalization is accompanied by a multilateral liberalization.
    Keywords: Trade Policy , CGE , Regional integration , SADC , Madagascar , International trade agreements , Madagascar , Trade policy , Southern African Development Community , Africa , Trade liberalization , Economic models ,
    Date: 2007–03–22
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:07/66&r=cmp
  4. By: Günter Coenen (Directorate General Research, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Peter McAdam (Directorate General Research, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Roland Straub (Directorate General International and European Relations, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: In this paper, we employ a calibrated two-country version of the New Area-Wide Model (NAWM) currently under development at the European Central Bank to examine the potential benefits and spillovers of reducing labour-market distortions caused by euro area tax structures. Our analysis shows that lowering tax distortions to levels prevailing in the United States would result in an increase in hours worked and output by more than 10 percent. At the same time, tax reductions would have positive spillovers to the euro area’s trade partners, bolstering the case for tax reforms from a global perspective. Finally, we illustrate that, in the presence of heterogeneous households, distributional effects may be of importance when gauging the impact of tax reforms. JEL Classification: E32, E62.
    Keywords: DSGE modelling, limited asset-market participation, fiscal policy, tax reform, euro area.
    Date: 2007–04
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070747&r=cmp
  5. By: Alan Kirman; Sheri Markose; Simone Giasante; Paolo Pin
    Abstract: We study the formation of social networks that are based on local interaction and simple rule following. Agents evaluate the profitability of link formation on the basis of the Myerson-Shapley principle that payoffs come from the marginal contribution they make to coalitions. The NP-hard problem associated with the Myerson-Shapley value is replaced by a boundedly rational 'spatially' myopic process. Agents consider payoffs from direct links with their neighbours (level 1) which can include indirect payoffs from neighbours' neighbours (level 2) and up to M-levels that are far from global. Agents dynamically break away from the neighbour to whom they make the least marginal contribution. Computational experiments show that when this self-interested process of link formation operates at level 2 neighbourhoods, agents self-organize into stable and efficient network structures that manifest reciprocity, equity and segregation reminiscent of hunter gather groups. A large literature alleges that this is incompatible with self-interested behaviour and market oriented marginality principle in the allocation of value. We conclude that it is not this valuation principle that needs to be altered to obtain segregated social networks as opposed to global components, but whether it operates at level 1 or level 2 of social neighbourhoods. Remarkably, all M>2 neighbourhood calculations for payoffs leave the efficient network structures identical to the case when M=2.
    Date: 2007–04–28
    URL: http://d.repec.org/n?u=RePEc:esx:essedp:629&r=cmp

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