New Economics Papers
on Computational Economics
Issue of 2009‒01‒10
four papers chosen by

  1. Pakistan's cotton and textile economy: Intersectoral linkages and effects on rural and urban poverty By Cororaton, Caesar B.; Orden, David
  2. Alternative methods of solving state-dependent pricing models By Edward S. Knotek II; Stephen Terry
  3. Fast heuristics for a dynamic paratransit problem By Cremers, Marloes; Klein Haneveld, Wim; Vlerk, Maarten van der;
  4. Marginal productivity index policies for problems of admission control and routing to parallel queues with delay By Peter Jacko; Jose Nino-Mora

  1. By: Cororaton, Caesar B.; Orden, David
    Abstract: "Pakistan's economy relies heavily on its cotton and textile sectors. The cotton-processing and textile industries make up almost half of the country's manufacturing base, while cotton is Pakistan's principal industrial crop, supplying critical income to rural households. Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of export receipts. The future of this vital component of the national economy is uncertain, however. These industries face the challenges of unstable world prices and increased competition resulting from global liberalization of the multilateral textile and clothing trade. At the same time, Pakistan's macroeconomic situation is volatile. Given such challenges and volatility, this study investigates what the future might hold for Pakistan's cotton and textile industries and its implications for rural and urban poverty reduction in the country. The study uses a computable general equilibrium (CGE) model calibrated to a 2001–02 social accounting matrix of the Pakistan economy to conduct experimental simulations of possible economic changes. The CGE model results are linked to the nation-wide 2001–02 Pakistan Household Integrated Economic Survey to examine the implications the simulated developments have for Pakistani poverty. Simulation 1 examines the effects of a doubling of foreign capital inflows, as occurred from 2002 to 2006, before a subsequent financial crisis emerged in 2008. Simulation 2 analyzes the counterfactual effects of an increase in world prices of cotton lint and yarn and/or textiles which would have offset declines experienced in the late 1990s and early 2000s. Pakistan's strong textile association motivates Simulation 3, which examines the effects of a 5-percent increase in government production subsidies to the industry. Simulation 4 uses a dynamic-recursive version of the model to analyze the short- and long-run effects of a 5-percent increase of total factor productivity (TFP) in cotton, lint and yarn, and textile production." from text
    Keywords: Textile industry, Rural-urban linkages, Poverty reduction,
    Date: 2008
  2. By: Edward S. Knotek II; Stephen Terry
    Abstract: We use simulation-based techniques to compare and contrast two methods for solving state-dependent pricing models: discretization, which solves and simulates the model on a grid; and collocation, which relies on Chebyshev polynomials. While both methods produce qualitatively similar results, statistically significant quantitative differences do arise. We present evidence favoring discretization over collocation in this context, given a lack of robustness in the latter.
    Date: 2008
  3. By: Cremers, Marloes; Klein Haneveld, Wim; Vlerk, Maarten van der; (Groningen University)
    Abstract: In a previous paper we developed a non-standard two-stage recourse model for the dynamic day-ahead paratransit planning problem. Two heuristics, which are frequently applied in the recourse model, contain many details which leads to large CPU times to solve instances of relatively small size. In this paper we simplify both heuristics to decrease CPU time considerably while maintaining the quality of the obtained solutions as much as possible. Numerical experiments on (semi-)realistic instances, inspired by practice, show that our recourse model with fast heuristics provides acceptable solutions within reasonable time.
    Date: 2008
  4. By: Peter Jacko; Jose Nino-Mora
    Abstract: In this paper we consider the problem of admission control of Bernoulli arrivals to a buffer with geometric server, in which the controller’s actions take effect one period after the actual change in the queue length. An optimal policy in terms of marginal productivity indices (MPI) is derived for this problem under the following three performance objectives: (i) minimization of the expected total discounted sum of holding costs and rejection costs, (ii) minimization of the expected time-average sum of holding costs and rejection costs, and (iii) maximization of the expected time-average number of job completions. Our employment of existing theoretical and algorithmic results on restless bandit indexation together with some new results yields a fast algorithm that computes the MPI for a queue with a buffer size of I performing only O(I) arithmetic operations. Such MPI values can be used both to immediately obtain the optimal thresholds for the admission control problem, and to design an index policy for the routing problem (with possible admission control) in the multi-queue system. Thus, this paper further addresses the problem of designing and computing a tractable heuristic policy for dynamic job admission control and/or routing in a discrete time Markovian model of parallel loss queues with one-period delayed state observation and/or action implementation, which comes close to optimizing an infinite-horizon problem under the above three objectives. Our approach seems to be tractable also for the analogous problems with larger delays and, more generally, for arbitrary restless bandits with delays.
    Keywords: Admission control, Routing, Parallel queues, Delayed information, Delayed action implementation, Index policy, Restless bandits, Marginal productivity index
    Date: 2008–12

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