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on Computational Economics |
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Issue of 2009‒08‒30
fourteen papers chosen by |
| By: | Marie Lebreton (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Katia Melnik (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579) |
| Abstract: | This paper studies the effects of income, education and active memberships in voluntary organizations and clubs on "social capital" by using individual French data and allowing for parameter heterogeneity (Durlauf and Fafchamps, 2003). Survey responses to the questions concerning trust, social norms and individual involvement in the local life are used as proxies of social capital. The model developed in this paper is an Artificial Neural Network model or more precisely the Neuro-Coecient Smooth Transition Auto-Regressive (NCSTAR) model. It gives a vector of estimates for every observation of the dataset as a nonlinear function of its geographical position and its individual attributes. We show that accounting for parameter heterogeneity considerably improves the fit of the estimated model in comparison with the broadly used multinomial logit model. Our results suggest empirical evidences of signicant positive direct and indirect effects of active membership in voluntary organizations on trust (or rather trustworthiness, Glaeser et al, 2000) and individual's involvement in his or her community's life. This finding supports the considering of membership in voluntary organizations in France as promoting the values of cooperation and positive tendency towards public issues. However, the studied relationships are not stable across French departments and some regional patterns are detected. |
| Keywords: | Social capital, Parameter heterogeneity, Neural network models. |
| Date: | 2009–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00410530_v1&r=cmp |
| By: | Joseph Francois (Johannes Kepler University Linz; U.S. Bureau of Labor Statistics) |
| Abstract: | This technical report brings together two papers on the linear and non-linear versions of the multi-region trade simulation model known as GSIM. It outlines a modeling strategy for the partial equilibrium analysis of tariff and antidumping policy on a global level. The framework is scalable, employs national product differentiation, and allows for the simultaneous assessment of trade policy changes (duties and undertakings), at the industry level, on a global, regional, or national level. Results allow the assessment of importer and exporter effects related to tariff revenues, exporter (producer) surplus, and importer (consumer) surplus. With additional data, national employment effects can also be fit into the basic framework. NOTE the *.zip archive includes Excel template models, and the technical papers that explain the model. |
| Keywords: | GSIM, antidumping, partial equilibrium model, trade policy modeling, simulation model, global markets |
| JEL: | F17 F14 F21 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lnz:wpaper:20090803a&r=cmp |
| By: | Joseph Francois (Johannes Kepler University Linz); H. Keith Hall (U.S. Bureau of Labor Statistics) |
| Abstract: | This technical report brings together two papers on the linear and non-linear versions of the multi-region trade simulation model known as GSIM. It outlines a modeling strategy for the partial equilibrium analysis of tariff and antidumping policy on a global level. The framework is scalable, employs national product differentiation, and allows for the simultaneous assessment of trade policy changes (duties and undertakings), at the industry level, on a global, regional, or national level. Results allow the assessment of importer and exporter effects related to tariff revenues, exporter (producer) surplus, and importer (consumer) surplus. With additional data, national employment effects can also be fit into the basic framework. NOTE the *.zip archive includes Excel template models, and the technical papers that explain the model. |
| Keywords: | GSIM, antidumping, partial equilibrium model, trade policy modeling, simulation model, global markets |
| JEL: | F17 F14 F21 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lnz:wpaper:20090803&r=cmp |
| By: | Ericson, Peter (Empirica); Flood, Lennart (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper follows the theory of optimal taxation and the goal is to identify a tax/benefit design that maximizes social welfare. A two stage process is proposed where the individuals preferred choice of leisure and consumption is solved in the first stage, and the second stage identifies the tax/benefit system that maximize the social welfare function. Our study deviates from the mainstream literature as the first stage is based on a static micro simulation model with behavioral responses. The behavioralresponses take two different forms and use two different types of models; first binary models that describe mobility in/out from non-work states such as old age pension, disability, unemployment, long term sickness, and second models that describe change in working hours and welfare participation. Compared to the current Swedish income tax, our results suggests that increased basic deduction and in-work tax credit in combination with a reduction of the progressive national taxes would increase welfare. We also find strong support for increased housing allowances. The reforms are financed by a tax based on the same tax base as the proportional municipal income tax.<p> |
| Keywords: | Micro simulation; tax-benefit system; in-work tax credit reform; optimal taxation |
| JEL: | C80 D31 H24 |
| Date: | 2009–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0375&r=cmp |
| By: | Kenneth Judd; Lilia Maliar; Serguei Maliar |
| Abstract: | We develop numerically stable stochastic simulation approaches for solving dynamic economic models. We rely on standard simulation procedures to simultaneously compute an ergodic distribution of state variables, its support and the associated decision rules. We differ from existing methods, however, in how we use simulation data to approximate decision rules. Instead of the usual least-squares approximation methods, we examine a variety of alternatives, including the least-squares method using SVD, Tikhonov regularization, least-absolute deviation methods, principal components regression method, all of which are numerically stable and can handle ill-conditioned problems. These new methods enable us to compute high-order polynomial approximations without encountering numerical problems. Our approaches are especially well suitable for high-dimensional applications in which other methods are infeasible. |
| JEL: | C63 C68 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15296&r=cmp |
| By: | James A. Giesecke |
| Abstract: | This paper details the construction of a large-scale computable general equilibrium (CGE) model for a single U.S. region. The model contains detailed treatment of margins and taxes, features not typically given prominence in U.S. regional CGE models. The starting point for the core of the CGE model's data base is information from IMPLAN, producers of regional I/O data at the U.S. county and state levels. IMPLAN's I/O tables, however, are in producer prices with aggregated treatment of margins and taxes. The methods for reconfiguring the I/O data into basic price flows with direct allocation of imports and a disaggregated treatment of taxes and margins are described. The method is applied to construction of a Los Angeles County model. An illustrative simulation of a productivity improvement in the Los Angeles County economy is then discussed. |
| Keywords: | CGE, IMPLAN |
| JEL: | C68 R13 R15 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-187&r=cmp |
| By: | Fioretti, Guido |
| Abstract: | We reconstruct Cohen, March and Olsen's Garbage Can model of organizational choice as an agent-based model. In the original model, the members of an organization can postpone decision-making. We add another means for avoiding making decisions, that of buck-passing difficult problems to colleagues. We find that selfish individual behavior, such as postponing decision-making and buck-passing, does not necessarily imply dysfunctional consequences for the organizational level. The simulation experiments confirm and extend some of the most interesting conclusions of the Garbage Can model: Most decisions are made without solving any problem, organization members face the same old problems again and again, and the few problems that are solved are generally handled at low hierarchical levels. These findings have an implication that was overseen in the original model, namely, that top executives need not be good problem-solvers. |
| Keywords: | Organizational Decision Making; Garbage Can Model; Postponing Decisions; Buck-Passing |
| JEL: | D23 D89 D79 |
| Date: | 2009–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16977&r=cmp |
| By: | Joseph Francois (Johannes Kepler University Linz); Miriam Manchin (University College London) |
| Abstract: | We evaluate the effects of potential measures to liberalize trade between the EU and the CIS using a computable general equilibrium (CGE) model. We look at the CIS as an aggregate and we also present results for individual CIS countries. Our CGE model takes different underlying industry specific market structures and elasticities into account. Furthermore, the model incorporates estimated non-tariff trade barriers to trade in services. The results are compared to a baseline that incorporates recent developments in the trade policy environment, i.e. the phase out of ATC, enlargement of the EU and CIS accessions to the WTO. The analysis takes agricultural liberalization, liberalization in industrial tariffs, and liberalization in services trade as well as trade facilitation measures into account. While there is important heterogeneity in the impact of FTAs on individual countries, the results indicate that the CIS as a whole would experience a negative income effect if the FTA would be limited only to trade in goods. This is due to strong trade diversion effects. The CIS states have high tariffs, and these would remain against third countries under an FTA. This implies that the CIS would most likely to benefit from an FTA with the EU if it would incorporate deeper forms of integration not being limited to liberalization of tariffs in goods, or if it is accompanied by a general reduction in CIS tariffs against third countries. |
| Keywords: | CGE, EU-CIS Free Trade Area, Russia, Ukraine, CIS |
| JEL: | F13 F15 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lnz:wpaper:20090805&r=cmp |
| By: | Thomas S. Lontzek; Daiju Narita |
| Abstract: | We apply standardized numerical techniques of stochastic optimization (Judd [1998]) to the climate change issue. The model captures the feature that the effects of uncertainty are different with different levels of agent's risk aversion. A major finding is that the effects of stochasticity differ even in sign as to emission control with varying parameters: introduction of stochasticity may increase or decrease emission control depending on parameter settings, in other words, uncertainties of climatic trends may induce people's precautionary emission reduction but also may drive away money from abatement |
| Keywords: | climate change and uncertainties, stochastic control, climate policy |
| JEL: | C63 Q54 D81 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1539&r=cmp |
| By: | Joseph Francois (Johannes Kepler University Linz); Hanna Norberg (Lund (School of Economics and Business) and IIDE); Miriam Manchin (University College London); Annette Pelkmans Balaoing (Erasmus University Rotterdam) |
| Abstract: | We analyze the effects of potential measures to liberalize trade between the European Union and ASEAN using a computable general equilibrium (CGE) model of world trade. The results on the whole point to positive effects for most of ASEAN under all scenarios, and small but positive effects over the long-run for the European Union. Throughout the study, some negative results are observed for other ASEAN countries (Brunei, Cambodia, Laos, and Myanmar). As expected, income and trade gains increase as liberalization deepens and as more dynamic effects are taken into account. The latter is particularly important for ASEAN, whose growth is often constrained by insufficient capital resources. In terms of income effects, the EU and Singapore gain the most, 51 and 78 percent of these gains, respectively, are due to the removal of the barriers to Services trade. It is Vietnam, however, that reaps the largest rise in GDP growth, while the EU, followed by Thailand, gains the most from the removal of non-tariff barriers. For the EU, about 87 percent of the income rise between these two scenarios is due to direct and indirect effects of trade facilitation alone. The productivity effects of an EU-ASEAN FTA are also visible in the form of higher wages both for skilled and unskilled workers. This is particularly important for ASEAN as this would mean that the employment increase in key growth sectors will outstrip the reduction of employment in contracting sectors. In terms of exports, the strong export performance of ASEAN projected here is largely driven by the export growth of ASEANÕs new members, i.e., Vietnam (35%), Cambodia, Laos & Myanmar (13%). There are negative effects for third countries, however. Indeed the net gains for most of ASEAN in the long-run are mirrored by comparable losses in third countries, much of which is carried by India and Pakistan. However, one must note that even in the scenario where the potential of trade diversion is the greatest, the effects are negative but rather trivial. Under the most ambitious trade liberalization scenario between the EU and ASEAN, it is PakistanÕs exports that are largely affected, with its exports falling by 2.4 percent. For the rest of the world, exports fall by just 0.05 percent, so that trade diversion effects can indeed be considered minimal. |
| Keywords: | CGE, EU-ASEAN Free Trade Area, GTAP |
| JEL: | F13 F15 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lnz:wpaper:20090801&r=cmp |
| By: | Joseph Francois (Johannes Kepler University Linz); Hanna Norberg (Lund (School of Economics and Business) and IIDE); Miriam Manchin (University College London) |
| Abstract: | We analyze the effects of potential measures to liberalize trade between the European Union and India using a computable general equilibrium (CGE) model of world trade. Overall, our analysis shows that there are potential gains to be reaped from signing a bilateral FTA between the EU and India. For all scenarios, the FTA is expected to yield positive real income effects for both economies, both in the short- and long-run. The effects are, however, quite small due to the low levels of bilateral trade. In the short run, the real income gains in the EU are expected to range between Û3 and Û4,4 billion (higher for more ambitious liberalization scenarios), which amount to less than 0.1 percent of GDP. In the long run, the effects of an FTA in the EU are much smaller. For the Indian economy, the short-term income effects in absolute measure are similar to those in the EU, but due to differences in the size of economies, the relative effect is bigger in India (ranging from 0.1 to 0.3 percent of GDP). In the long-run, the effects on the Indian economy are expected to be larger. |
| Keywords: | CGE, EU-India Free Trade Area, GTAP |
| JEL: | F13 F15 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:lnz:wpaper:20080601&r=cmp |
| By: | Silvio Schmidt; Claudia Kemfert; Eberhard Faust |
| Abstract: | This paper simulates the increase in the average annual loss from tropical cyclones in the North Atlantic for the years 2015 and 2050. The simulation is based on assumptions concerning wealth trends in the regions affected by the storms, considered by the change in material assets (capital stock). Further assumptions are made about the trend in storm intensity resulting from anthropogenic climate change. The simulations use a stochastic model that models the annual storm loss from the number of storms and the loss per storm event. The paper demonstrates that increasing wealth will continue to be the principle loss driver in the future (average annual loss in 2015 +32%, in 2050 +308%). But climate change will also lead to higher losses (average annual loss in 2015 +4%, in 2050 +11%). In order to reduce the uncertainties surrounding the assumptions on the trend in capital stock and storm intensity, a sensitivity analysis was carried out, based on the assumptions from current studies on the future costs for tropical storms. |
| Keywords: | climate change, tropical cyclones, natural catastrophes, insurance |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp914&r=cmp |
| By: | Claudia Kemfert; Hans Kremers; Truong Truong |
| Abstract: | In this paper, we use a computable general equilibrium model (WIATEC) to study the potential impact of implementing Europe's 20-20-20 climate policy. The results show that the economic costs of implementing the policy are only moderate and within the range of recent empirical evidence. Furthermore, they also indicate that there is a possibility that the existing allocations to the Europena sectors participating in the EU Emissions Trading Scheme (EU ETS) are on the low side, and therefore, there are still rooms for movement in the future. |
| Keywords: | Climate policy, Energy policy, EU 20-20-20 plan, EU Emission Trading System, Computable General Equilibrium |
| JEL: | C63 C68 D58 F11 F18 H21 O13 P28 Q54 Q58 R13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp913&r=cmp |
| By: | John Creedy (Department of Economics, The University of Melbourne); Nicolas Hérault (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | Extensive research has shown that few robust results regarding the optimal tax structure are available. Moreover, the stylised models used in optimal tax analyses are not appropriate for practical policy advice. This paper proposes a method of examining optimal marginal income tax reforms using behavioural microsimulation models in which the full extent of population heterogeneity is represented along with all the details of highly complex tax and transfer systems. The approach is illustrated using the Australian microsimulation model MITTS. The results show that the marginal welfare changes for the Australian income tax structure are not symmetric with respect to increases and decreases in tax rates, largely because of the asymmetry in tax revenue changes arising from differential labour supply effects in different ranges of the income distribution. In addition, the extent of inequality aversion was found to play a much larger role in the determination of the optimal direction of rate changes than the form of the welfare metric or the specification of adult equivalence scales. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2009n23&r=cmp |