nep-cmp New Economics Papers
on Computational Economics
Issue of 2007‒11‒17
six papers chosen by
Stan Miles
Thompson Rivers University

  1. Neural Network Based Models for Efficiency Frontier Analysis: An Application to East Asian Economies' Growth Decomposition By Hailin Liao; Bin Wang; Tom Weyman-Jones
  2. Individual Tariffs for Mobile Services: Theoretical Framework and a Computational Case in Mobile Music By Chen, H.; Pau, L-F.
  3. A Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe By Margaret Chitiga; Ramos Mabugu; Tonia Kandiero
  4. Is Increased Agricultural Protection Beneficial for South Africa? By Margaret Chitiga; Ramos Mabugu
  5. South Africa Trade Liberalization and Poverty in a Dynamic Microsimulation CGE Model By Ramos Mabugu; Margaret Chitiga
  6. Dynamic Effects of Agriculture Trade in the Context of Domestic and Global Liberalisation: A CGE Analysis for Pakistan By Rizwana Siddiqui

  1. By: Hailin Liao (Dept of Economics, Loughborough University); Bin Wang (Dept of Economics, Loughborough University); Tom Weyman-Jones (Dept of Economics, Loughborough University)
    Abstract: There has been a long tradition in business and economics to use frontier analysis to assess a production unit’s performance. The first attempt utilized the data envelopment analysis (DEA) which is based on a piecewise linear and mathematical programming approach, whilst the other employed the parametric approach to estimate the stochastic frontier functions. Both approaches have their advantages as well as limitations. This paper sets out to use an alternative approach, i.e. artificial neural networks (ANNs) for measuring efficiency and productivity growth for seven East Asian economies at manufacturing level, for the period 1963 to 1998, and the relevant comparisons are carried out between DEA and ANN, and stochastic frontier analysis (SFA) and ANN in order to test the ANNs’ ability to assess the performance of production units. The results suggest that ANNs are a promising alternative to traditional approaches, to approximate production functions more accurately and measure efficiency and productivity under non-linear contexts, with minimum assumptions.
    Keywords: total factor productivity, neural networks, stochastic frontier analysis, DEA, East Asian economies
    JEL: D24 C45 O47 O53 L60
    Date: 2007–11
  2. By: Chen, H.; Pau, L-F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper introduces individual tariffs at service and content bundle level in mobile communications. It gives a theoretical framework (economic, sociological) as well as a computational game solution method. The user can be an individual or a community. Individual tariffs are decided through interactions between the user and the supplier. A numerical example from mobile music illustrates the concepts.
    Keywords: Individual tariffs;mobile communication services;computational games;risks;
    Date: 2007–08–28
  3. By: Margaret Chitiga (Department of Economics, University of Pretoria); Ramos Mabugu (Department of Economics, University of Pretoria); Tonia Kandiero (National Treasury)
    Abstract: The paper uses a micro-simulation computable general equilibrium (CGE) model to study the impact on poverty of a complete removal of tariffs in Zimbabwe. The model incorporates 14006 households derived from the 1995 Poverty Assessment Study Survey. This paper’s novelty is that it is one among a small group of papers that incorporates individual households in the CGE model as opposed to having representative households. Using individual households allows for a comprehensive analysis of poverty. The complete removal of tariffs favours exporting sectors. Poverty falls in the economy while inequality hardly changes. The results differ between rural and urban areas.
    Keywords: Computable General Equilibrium, Trade Liberalisation, Micro-simulation, Poverty, Inequality
    JEL: C68 D31 D58 I32
    Date: 2007–09
  4. By: Margaret Chitiga (Department of Economics, University of Pretoria); Ramos Mabugu (Financial and Fiscal Commission)
    Abstract: This paper focuses on the effects that a higher tariff on agriculture and food imports could have on poverty and the macroeconomy using a top down computable general equilibrium microsimulation model. This question is of broader relevance to developing countries that may be contemplating the use of World Trade Organisation permissible trade barriers so as to achieve a domestic policy objective. Generally speaking, the results suggest that doubling protection of agriculture and food would lead to a reallocation of labour toward the sectors with high initial protection and those with high domestic orientation. Agriculture and food sectors are harmed by increased protection if the government chooses to use indirect tax rates to compensate for revenue changes because of induced demand contraction by the indirect tax adjustment. Exports and imports in general decline. The analysis also shows that increasing food and agricultural protection has very negligible but negative effects on welfare and poverty.
    Keywords: CGE model; microsimulation, trade policy, special and differential treatment, poverty, welfare, South Africa
    JEL: D33 D58 E27 F17 I32 O15 O55
    Date: 2007–09
  5. By: Ramos Mabugu (Financial and Fiscal Commission); Margaret Chitiga (Department of Economics, University of Pretoria)
    Abstract: South Africa has undergone significant trade liberalization since the end of apartheid. Average protection has fallen while openness has increased. However, economic growth has been insufficient to make inroads into the high unemployment levels. Poverty levels have also risen. The country’s experience presents an interesting challenge for many economists that argue that trade liberalization is pro-poor and pro-growth. This study investigates the short and long term effects of trade liberalization using a dynamic microsimulation computable general equilibrium approach. Trade liberalization has been simulated by a complete removal of all tariffs on imported goods and services, and by a combination of tariff removal and an increase of total factor productivity. The main findings are that a complete tariff removal on imports has negative welfare and poverty reduction impacts in the short run which turns positive in the long term due to the accumulation effects. When the tariff removal simulation is combined with an increase of total factor productivity, the short and long run effects are both positive in terms of welfare and poverty reduction. The mining sector (highest export orientation) is the biggest winner from the reforms while the textiles sector (highest initial tariff rate) is the biggest loser. African and Colored households gain the most in terms of welfare and numbers being pulled out of absolute poverty by trade liberalization.
    Keywords: Sequential dynamic CGE, microsimulation, trade liberalization, total factor productivity, poverty, welfare, growth, South Africa
    JEL: D58 E27 F17 I32 O15 O55
    Date: 2007–09
  6. By: Rizwana Siddiqui (Pakistan Institute of Development Economics, Islamabad.)
    Abstract: This paper studies dynamic effects of agriculture trade in the context of domestic and global liberalisation. Being the largest sector of the economy, the agriculture sector contributes substantially to the growth process. Using a small CGE model for Pakistan and a 2002 Pakistan Social Accounting Matrix as data base, the simulations are conducted to measure the effects of domestic agriculture trade liberalisation in isolation and in conjunction with changes in the world economy. The novelty of this paper is that it introduces dynamics in the Pakistani CGE model through capital accumulation. The results illuminate the greater effectiveness of agriculture trade liberalisation in promoting the overall growth process, given increased market access because of liberalisation in the world economy.
    Keywords: International Trade, Growth, Dynamic CGE
    JEL: O4 F15 F14
    Date: 2007

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