nep-cmp New Economics Papers
on Computational Economics
Issue of 2007‒07‒13
five papers chosen by
Stan Miles
Thompson Rivers University

  1. Convergence in Finite Cournot Oligopoly with Social and Individual Learning By Thomas VALLEE (LEN - IAE Nantes); Murat YILDIZOGLU (GREThA)
  2. Assessing the Behaviour of Non-Survey Methods of Constructing Regional Input-Output Tables through a Monte Carlo Simulation By Francesco CHELLI; Andrea BONFIGLIO
  3. Taylor rules with headline inflation: a bad idea By Rajeev Dhawan; Karsten Jeske
  4. Higher order approximations of stochastic rational expectations models By Kowal, Pawel
  5. Dokumentation des Wohlfahrtsmoduls von FiFoSiM By Brenneisen, Frank; Peichl, Andreas

  1. By: Thomas VALLEE (LEN - IAE Nantes); Murat YILDIZOGLU (GREThA)
    Abstract: Convergence to Nash equilibrium in Cournot oligopoly is a problem that recurrently arises as a subject of study in economics. The development of evolutionary game theory has provided an equilibrium concept more directly connected with adjustment dynamics and the evolutionary stability of the equilibria of the Cournot game has been studied by several articles. Several articles show that the Walrasian equilibrium is the stable evolutionary solution of the Cournot game. Vriend (2000) proposes to use genetic algorithm for studying learning dynamics in this game and obtains convergence to Cournot equilibrium with individual learning. We show in this article how social learning gives rise to Walras equilibrium and why, in a general setup, individual learning can effectively yield convergence to Cournot instead of Walras equilibrium. We illustrate these general results by computational experiments.
    Keywords: Cournot oligopoly; Learning; Evolution; Selection; Evolutionary stability; Nash equilibrium; Genetic algorithms
    JEL: L13 L20 D43 C63 C73
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:grt:wpegrt:2007-07&r=cmp
  2. By: Francesco CHELLI (Universita' Politecnica delle Marche, Dipartimento di Economia); Andrea BONFIGLIO ([n.a.])
    Abstract: The paper aims to analyse the tendency of a battery of non-survey techniques of constructing regional I-O tables to over-(under-)estimate impact. The behaviour of the regionalization methods is assessed relatively to the techniques analysed. For this aim, a Monte Carlo simulation has been carried out. Then, a multidimensional scaling procedure has been applied to search for a common and repeated structure of differences among the methods and to give an immediate picture of possible implications, in terms of impact direction, coming from the choice of a given regionalisation method rather than another. Afterwards, the results have been compared to those obtained by applying the same procedure to 2000 I-O tables, which have been mechanically constructed for the 20 Italian regions. The results indicate that the choice of the regionalization method is crucial in estimating multipliers. According to the chosen method, the extent of multipliers could be considerably bigger or lower. This can have serious repercussions in terms of policy choices and, therefore, policy makers and I-O analysts should be aware of it. In addition, the results have confirmed a tendency of the methods to over-(under)-estimate impact both statistically and empirically. However, they have also shown that sectoral aggregation can reverse this tendency. Finally, from an economic point of view, it turned out that the most recent Flegg et al. Location Quotient (Flegg et al., 1995; Flegg and Webber, 1997) is the best to represent regional economies.
    Keywords: Monte Carlo simulation, impact analysis, multidimensional scaling procedure, non-survey techniques, regional policy
    JEL: C15 C67 R15
    Date: 2007–06
    URL: http://d.repec.org/n?u=RePEc:anc:wpaper:293&r=cmp
  3. By: Rajeev Dhawan; Karsten Jeske
    Abstract: Should a central bank accommodate energy price shocks? Should the central bank use core inflation or headline inflation with the volatile energy component in its Taylor rule? To answer these questions, we build a dynamic stochastic general equilibrium model with energy use, durable goods, and nominal rigidities to study the effects of an energy price shock and its impact on the macroeconomy when the central bank follows a Taylor rule. We then study how the economy performs under alternative parameterizations of the rule with different weights on headline and core inflation after an increase in the energy price. Our simulation results indicate that a central bank using core inflation in its Taylor rule does better than one using headline inflation because the output drop is less severe. In general, we show that the lower the weight on energy price inflation in the Taylor rule, the impact of an energy price increase on gross domestic product and inflation is also lower.
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:fip:fedawp:2007-14&r=cmp
  4. By: Kowal, Pawel
    Abstract: We describe algorithm to find higher order approximations of stochastic rational expectations models near the deterministic steady state. Using matrix representation of function derivatives instead of tensor representation we obtain simple expressions of matrix equations determining higher order terms.
    Keywords: perturbation method; DSGE models
    JEL: C63 C61 E17
    Date: 2007–07
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:3913&r=cmp
  5. By: Brenneisen, Frank; Peichl, Andreas
    Abstract: In diesem technischen Beitrag wird das neu entwickelte Wohlfahrtsmodul von FiFoSiM zur empirischen Analyse der Wohlfahrtswirkungen von Steuerreformen beschrieben.
    Keywords: Simulation, CGE, Mikrosimulation, Steuerreform, Wohlfahrt
    JEL: D58 H24 J20
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:zbw:uoccpe:5609&r=cmp

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