New Economics Papers
on Computational Economics
Issue of 2007‒09‒30
five papers chosen by

  1. The Bank of Canada's Version of the Global Economy Model (BoC-GEM) By Rene Lalonde; Dirk Muir
  2. A Multi-Agent Systems Approach to Microeconomic Foundations of Macro By Bill Gibson
  3. Economy-wide and distributional impacts of an oil price shock on the south African economy By Thierfelder, Karen; Robinson, Sherman; Korman, Vijdan; Kearney, Marna; Go, Delfin S.; Essama-Nssah, B.
  4. Income Growth in the 21st century : forecasts with an overlapping generations model By David, DE LA CROIX; FrŽdŽric DOCQUIER; Philippe, LIEGEOIS
  5. Record Linkage in Stata By Michael Blasnik

  1. By: Rene Lalonde; Dirk Muir
    Abstract: The Bank of Canada's version of the Global Economy Model (BoC-GEM) is derived from the model created at the International Monetary Fund by Douglas Laxton (IMF) and Paolo Pesenti (Federal Reserve Bank of New York and National Bureau of Economic Research). The GEM is a dynamic stochastic general-equilibrium model based on an optimizing representative-agent framework with balanced growth, and some additional features to help mimic the overlappinggenerations' class of models. Moreover, there is a concrete role for fiscal policy (albeit not fully optimized) and monetary policy. At the Bank, the model has been extended beyond the standard version with tradable and non-tradable goods sectors to include both oil and non-oil commodities. Furthermore, the oil sector is decomposed into oil for production and oil for retail consumption. The authors provide a detailed technical description of the model's structure and calibration. They also describe the model's simulation properties for Canadian and U.S. domestic shocks, and describe how the model can be used to analyze issues that currently are at the forefront for the Canadian and global economies, such as trade protectionism, global imbalances, and increasing oil prices.
    Keywords: Economic models; International topics; Business fluctuations and cycles
    JEL: C68 E27 E37 F32 F47
    Date: 2007
  2. By: Bill Gibson (University of Massachusetts Amherst)
    Abstract: This paper is part of a broader project that attempts to gener- ate microfoundations for macroeconomics as an emergent property of complex systems. The multi-agents systems approach is seen to produce realistic macro properties from a primitive set of agents that search for satisfactory activities, "jobs", in an informationally constrained, computationally noisy environment. There is frictional and structural unemployment, inflation, excess capacity, fi- nancial instability along with the possibility of relatively smooth expansion. There is no Phillips curve but an inegalitarian distribution of income emerges as fundamental property of the system.
    Keywords: Multi-agent system, agent-based models, microeconomic foundations, macroeconomics.
    JEL: D58 D83 D30
    Date: 2007–09
  3. By: Thierfelder, Karen; Robinson, Sherman; Korman, Vijdan; Kearney, Marna; Go, Delfin S.; Essama-Nssah, B.
    Abstract: As crude oil prices reach new highs, there is renewed concern about how external shocks will affect growth and poverty in developing countries. This paper describes a macro-micro framework for examining the structural and distributional consequences of a significant external shock-an increase in the world price of oil-on the South African economy. The authors merge results from a highly disaggregative computable general equilibrium model and a micro-simulation analysis of earnings and occupational choice based on socio-demographic characteristics of the household. The model provides changes in employment, wages, and prices that are used in the micro-simulation. The analysis finds that a 125 percent increase in the price of crude oil and refined petroleum reduces employment and GDP by approximately 2 percent, and reduces household consumption by approximately 7 percent. The oil price shock tends to increase the disparity between rich and poor. The adverse impact of the oil price shock is felt by the poorer segment of the formal labor market in the form of declining wages and increased unemployment. Unemployment hits mostly low and medium-skilled workers in the services sector. High-skilled households, on average, gain from the oil price shock. Their income rises and their spending basket is less skewed toward food and other goods that are most affected by changes in oil prices.
    Keywords: Economic Theory & Research,,Labor Policies,Markets and Market Access,Access to Finance
    Date: 2007–09–01
  4. By: David, DE LA CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics and CORE); FrŽdŽric DOCQUIER (FNRS and UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Philippe, LIEGEOIS (CEPS, INSTEAD, Luxemburg)
    Abstract: We forecast income growth over the periode 2000-2050 in the US, Canada, and France. To ground the forecasts on relationships that are as robust as possible t changes in the environment, we use a quantitative theoretical approach which consists in calibrating and simulating a general equilibrium model. Compared to existing studies to link taxes and public expenditures to demographic changes, and take into account the interaction between education and work experience. Forecasts show that growth will be weaker over the period 2010-2040. The gap between the US and the two other countries is increasing over time. France will catch-up and overtake Canada in 2020. Investigating alternative policy scenarios, we show that increasing the effective retirement age to 63 would be most profitable for France, reducing its gap with US by one third. A decrease in social security benefits would slightly stimulate growth but would have no real impact on the gap between the countries.
    Keywords: Aging, Forecast, Computable General Equilibrium, Education, Experience
    JEL: D58 E6 H55 J11 O40
    Date: 2007–09–29
  5. By: Michael Blasnik (M. Blasnik & Associates)
    Abstract: Record linkage involves attempting match records from two different data files that do not share a unique and reliable key field. It can be a tedious and challenging task when working with multiple administrative databases where one wants to match subjects using names, addresses and other identifiers that may have spelling and formatting variations. Formal record linkage methods often employ a combination of approximate string comparators and probabilistic matching algorithms to identify the best matches and assess their reliability. Some stand-alone software is available for this task. This presentation will introduce -reclink-, a rudimentary probabilistic record matching program for Stata. -reclink- employs a modified bigram string comparator and allows user-specified match and non-match weights. The algorithm also provides for blocking (both "or" and "and") to help improve speed for this otherwise slow procedure.
    Date: 2007–08–15

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