nep-cmp New Economics Papers
on Computational Economics
Issue of 2010‒01‒16
25 papers chosen by
Stan Miles
Thompson Rivers University

  1. Genetic and memetic algorithms for scheduling railway maintenance activities By Budai-Balke, G.; Dekker, R.; Kaymak, U.
  2. Forecasting with nonlinear time series models By Anders Bredahl Kock; Timo Teräsvirta
  3. Testing Institutional Arrangements via Agent-Based Modeling: A U.S. Electricity Market Example By Li, Hongyan; Sun, Junjie; Tesfatsion, Leigh S.
  4. A modified Panjer algorithm for operational risk capital calculations By Dominique Guegan; Bertrand Hassani
  5. Trade liberalization, poverty, and food security in India: By Panda, Manoj; Ganesh-Kumar, A.
  6. Simulating a Sequential Coalition Formation Process for the Climate Change Problem: First Come, but Second Served? By Michael Finus; Bianca Rundshagen; Johan Eyckmans
  7. Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions By Pouliakas, Konstantinos; Roberts, Deborah; Balamou, Eudokia; Psaltopoulos, Demetrios
  8. The Spatial Variability of Vehicle Densities as Determinant of Urban Network Capacity By Amin Mazloumian; Nikolas Geroliminis; Dirk Helbing
  9. In-Work Transfers in Good Times and Bad: Simulations for Ireland By Bargain, Olivier; Doorley, Karina
  10. How Large are the Impacts of Carbon Motivated Border Tax Adjustments? By Yan Dong; John Whalley
  11. Finding all minimal curb sets By Max Klimm; Jörgen Weibull
  12. Towards a Better Understanding of Disparities in Scenarios of Decarbonization: Sectorally Explicit Results from the RECIPE Project By Gunnar Luderer; Valentina Bosetti; Michael Jakob; Henri Waisman; Jan Steckel; Ottmar Edenhofer
  13. The Impact of the International Economic Crisis in South Africa By Margaret Chitiga; Ramos Mabugu; Hélène Maisonnave; Véronique Robichaud; Bernard Decaluwé
  14. Healthy aging versus demographic trends: the French case, estimated by markovian microsimulation methods By Sophie Thiébaut; Andrew Armstrong; Bruno Ventelou
  15. Macroeconomic Implications for Hong Kong SAR of Accommodative U.S. Monetary Policy By Papa M'B. P. N'Diaye
  16. The new macroeconometric model of the Polish economy By Katarzyna Budnik; Michal Greszta; Michal Hulej; Marcin Kolasa; Karol Murawski; Michal Rot; Bartosz Rybaczyk; Magdalena Tarnicka
  17. Productivity and Firm Selection: Quantifying the “New” Gains from Trade By Gianmarco I.P. Ottaviano; Gregory Corcos; Massimo Del Gatto; Giordano Mion
  18. External Shocks and the Indian Economy: Analyzing through a Small, Structural Quarterly Macroeconometric Model By NR, Bhanumurthy; Kumawat, Lokendra
  19. Allowance Allocation in a CO2 Emissions Cap-and-Trade Program for the Electricity Sector in California By Palmer, Karen; Burtraw, Dallas; Paul, Anthony
  21. Assessing the quality of institutions’ rankings obtained through multilevel linear regression models By Arpino, Bruno; Varriale, Roberta
  22. Does Economic Endogeneity of Site Facilities in Recreation Demand Models Lead to Statistical Endogeneity? By Chen, Min
  23. Recovering the Sunk Costs of R&D: the Moulds Industry Case By Carlos Daniel Santos
  24. The effects of taxes and benefits on income distribution in the enlarged EU By Paulus A; Čok M; Figari F; Hegedüs P; Kump N; Lelkes O; Levy H; Lietz C; Lüpsik S; Mantovani D; Morawski L; Sutherland H; Szivos P; Võrk A
  25. Determinantes da Queda na Desigualdade de Renda no Brasil By Ricardo Barros; Mirela de Carvalho; Samuel Franco; Rosane Mendonça

  1. By: Budai-Balke, G.; Dekker, R.; Kaymak, U. (Erasmus Econometric Institute)
    Abstract: Nowadays railway companies are confronted with high infrastructure maintenance costs. Therefore good strategies are needed to carry out these maintenance activities in a most cost effective way. In this paper we solve the preventive maintenance scheduling problem (PMSP) using genetic algorithms, memetic algorithms and a two-phase heuristic based on opportunities. The aim of the PMSP is to schedule the (short) routine activities and (long) unique projects for one link in the rail network for a certain planning period such that the overall cost is minimized. To reduce costs and inconvenience for the travellers and operators, these maintenance works are clustered as much as possible in the same time period. The performance of the algorithms presented in this paper are compared with the performance of the methods from an earlier work, Budai et al. (2006), using some randomly generated instances.
    Keywords: heuristics;maintenance optimization;opportunities;genetic algorithm;memetic algorithm
    Date: 2009–12–17
  2. By: Anders Bredahl Kock (CREATES, Aarhus University); Timo Teräsvirta (CREATES, Aarhus University)
    Abstract: In this paper, nonlinear models are restricted to mean nonlinear parametric models. Several such models popular in time series econo- metrics are presented and some of their properties discussed. This in- cludes two models based on universal approximators: the Kolmogorov- Gabor polynomial model and two versions of a simple artificial neural network model. Techniques for generating multi-period forecasts from nonlinear models recursively are considered, and the direct (non-recursive) method for this purpose is mentioned as well. Forecasting with com- plex dynamic systems, albeit less frequently applied to economic fore- casting problems, is briefly highlighted. A number of large published studies comparing macroeconomic forecasts obtained using different time series models are discussed, and the paper also contains a small simulation study comparing recursive and direct forecasts in a partic- ular case where the data-generating process is a simple artificial neural network model. Suggestions for further reading conclude the paper.
    Keywords: forecast accuracy, Kolmogorov-Gabor, nearest neigh- bour, neural network, nonlinear regression
    JEL: C22 C45 C52 C53
    Date: 2010–01–01
  3. By: Li, Hongyan; Sun, Junjie; Tesfatsion, Leigh S.
    Abstract: Many critical goods and services in modern-day economies are produced and distributed through complex institutional arrangements. Agent-based computational economics (ACE) modeling tools are capable of handling this degree of complexity. In concrete support of this claim, this study presents an ACE test bed designed to permit the exploratory study of restructured U.S. wholesale power markets with transmission grid congestion managed by locational marginal prices (LMPs). Illustrative findings are presented showing how spatial LMP cross-correlation patterns vary systematically in response to changes in the price responsiveness of wholesale power demand when wholesale power sellers have learning capabilities. These findings highlight several distinctive features of ACE modeling: namely, an emphasis on process rather than on equilibrium; an ability to capture complicated structural, institutional, and behavioral real-world aspects (micro-validation); and an ability to study the effects of changes in these aspects on spatial and temporal outcome distributions.
    Keywords: Institutional Design, Agent-Based Computational Economics, U.S. Electricity Market, Locational Marginal Pricing, Spatial Cross-Correlations, AMES Test Bed
    JEL: B4 C0 C6 C7 C9 D4 L1 Q4 R1
    Date: 2010–01–11
  4. By: Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Bertrand Hassani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: Operational risk management inside banks and insurance companies is an important task. The computation of a risk measure associated to these kinds of risks lies in the knowledge of the so-called loss distribution function (LDF). Traditionally, this LDF is computed via Monte Carlo simulations or using the Panjer recursion, which is an iterative algorithm. In this paper, we propose an adaptation of this last algorithm in order to improve the computation of convolutions between Panjer class distributions and continuous distributions, by mixing the Monte Carlo method, a progressive kernel lattice and the Panjer recursion. This new hybrid algorithm does not face the traditional drawbacks. This simple approach enables us to drastically reduce the variance of the estimated value-at-risk associated with the operational risks and to lower the aliasing error we would have using Panjer recursion itself. Furthermore, this method is much less timeconsuming than a Monte Carlo simulation. We compare our new method with more sophisticated approaches already developed in operational risk literature.
    Keywords: Operational risk ; Panjer algorithm ; Kernel ; numerical integration ; convolution.
    Date: 2009–10
  5. By: Panda, Manoj; Ganesh-Kumar, A.
    Keywords: food security, Nutrition, Computable general equilibrium (CGE), Globalization, Markets, trade,
    Date: 2009
  6. By: Michael Finus (University of Stirling); Bianca Rundshagen (University of Hagen); Johan Eyckmans (atholieke Universiteit Leuven, Centrum voor Economische Studiën and Hogeschool-Universiteit Brussels)
    Abstract: We analyze stability of self-enforcing climate agreements based on a data set generated by the CLIMNEG world simulation model (CWSM), version 1.2. We consider two new aspects which appear important in actual treaty-making. First, we consider a sequential coalition formation process where players can make proposals which are either accepted or countered by other proposals. Second, we analyze whether a moderator, like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordinating actions by making recommendations that must be Pareto-improving to all parties. We discuss the conceptual difficulties of implementing our algorithm.
    Keywords: International Climate Agreements, Sequential Coalition Formation, Coordination through Moderator, Integrated Assessment Model, Algorithm for Computations
    JEL: C79 H87 Q54
    Date: 2009–12
  7. By: Pouliakas, Konstantinos (University of Aberdeen); Roberts, Deborah (University of Aberdeen); Balamou, Eudokia (University of Patras); Psaltopoulos, Demetrios (University of Patras)
    Abstract: The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.
    Keywords: immigration, CGE, skills, wage inequality, brain-drain, regional economies
    JEL: D33 D58 R13 R23
    Date: 2009–12
  8. By: Amin Mazloumian; Nikolas Geroliminis; Dirk Helbing
    Abstract: Due to the complexity of the traffic flow dynamics in urban road networks, most quantitative descriptions of city traffic so far are based on computer simulations. This contribution pursues a macroscopic (fluid-dynamic) simulation approach, which facilitates a simple simulation of congestion spreading in cities. First, we show that a quantization of the macroscopic turning flows into units of single vehicles is necessary to obtain realistic fluctuations in the traffic variables, and how this can be implemented in a fluid-dynamic model. Then, we propose a new method to simulate destination flows without the requirement of individual route assignments. Combining both methods allows us to study a variety of different simulation scenarios. These reveal fundamental relationships between the average flow, the average density, and the variability of the vehicle densities. Considering the inhomogeneity of traffic as an independent variable can eliminate the scattering of congested flow measurements. The variability also turns out to be a key variable of urban traffic performance. Our results can be explained through the number of full links of the road network, and approximated by a simple analytical formula.
    Keywords: Urban traffic, network dynamics, congestion spreading, macroscopic traffic model, fundamental diagram
    Date: 2009–11–19
  9. By: Bargain, Olivier (University College Dublin); Doorley, Karina (University College Dublin)
    Abstract: In-work transfers are often seen as a good trade-off between redistribution and efficiency, as they alleviate poverty among low-wage households while increasing financial incentives to work. The present study explores the consequences of extending these transfers in Ireland, where support for low-wage households has been of limited scope. The employment and poverty effects of alternative policies are analyzed thanks to counterfactual simulations built using a micro-simulation model, the Living in Ireland Survey 2001 and labour supply estimations. Firstly, we study the effect of recent extensions of the existing scheme, the Family Income Supplement (FIS), and of its replacement by the refundable tax credit in force in the UK. Secondly, little is known about the impact of macro-level changes on the distribution of resources at the household level, which is particularly relevant in a country deeply affected by the current economic downturn. We suggest a preliminary analysis of the capacity of alternative in-work transfer scenarios to cushion the negative impact of earnings losses and cuts in the minimum wage.
    Keywords: microsimulation, working poor, welfare, labour supply, take-up
    JEL: C25 C52 H31 J22
    Date: 2009–12
  10. By: Yan Dong (University of Western Ontario); John Whalley (University of Western Ontario)
    Abstract: This paper discusses the size of impact of carbon motivated border tax adjustments on world trade. We report numerical simulation results which suggest that impacts on welfare, trade, and emissions will likely be small. This is because proposed measures use carbon emissions in the importing country in producing goods similar to imports rather than carbon content in calculating the size of barriers. Moreover, because border adjustments involve both tariffs and export rebates, it is the differences in emissions intensity across sector rather than emissions level which matters. Where there is no difference in emissions intensities across sectors, Lerner symmetry holds for the border adjustment and no relative effects occur. In our numerical simulation analyses border tax adjustments accompany carbon emission reduction commitments made either unilaterally , or as part of a global treaty and to be applied against non signatories. We use a four-region (US, EU, China, ROW) general equilibrium structure which captures energy trade and has endogenously determined energy supply so that global emissions can change with policy changes. We calibrate our model to 2006 data and analyze the potential impacts of both EU and US carbon pricing at various levels, either along with or without carbon motivated BTAs policies on welfare, emissions, trade flows and production. Results indicate only small impacts of these measures on global emissions, trade and welfare, but the signs of effects are as expected. BTAs alleviate leakage effects as expected. In trade impacts, compared with no BTAs, BTAs reduce imports of committing countries, and increase imports by other countries. EU and US BTAs against China reduce exports by China. With BTAs, the value of production in the country with carbon reduction measures are introduced increases, and other country’s production decreases compared with the case of no BTAs. With the contraction of world trade flows caused by the financial crisis, carbon motivated BTAs offer a prospect of a compounding effect in a world which is going protectionist and decarbonized at the same time, but the added effects of BTAs seems small.
    Date: 2009
  11. By: Max Klimm (Institut fur Mathematik - Technische Universität Berlin); Jörgen Weibull (SSE - Department of Economics - Stockholm School of Economics, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: Sets closed under rational behavior were introduced by Basu and Weibull (1991) as subsets of the strategy space that contain all best replies to all strategy profiles in the set. We here consider a more restrictive notion of closure under rational behavior: a subset of the strategy space is strongly closed under rational behavior, or sCURB, if it contains all best replies to all probabilistic beliefs over the set. We present an algorithm that computes all minimal sCURB sets in any given finite game. Runtime measurements on two-player games (where the concepts of CURB and sCURB coincide) show that the algorithm is considerably faster than the earlier developed algorithm, that of Benisch et al. (2006).
    Keywords: curb set, rational behavior, algorithm, rationalizability.
    Date: 2009–12–18
  12. By: Gunnar Luderer (Potsdam Institute for Climate Impact Research); Valentina Bosetti (CMCC, FEEM and Princeton Environmental Institute); Michael Jakob (Potsdam Institute for Climate Impact Research); Henri Waisman (Centre International de Recherche sur l’ l'Environnement et le Développement); Jan Steckel (Potsdam Institute for Climate Impact Research); Ottmar Edenhofer (Potsdam Institute for Climate Impact Research)
    Abstract: This paper presents results from a model intercomparison exercise among regionalized global energy-economy models conducted in the context of the RECIPE project. The economic adjustment effects of long-term climate policy aiming at stabilization of atmospheric CO2 concentrations at 450 ppm are investigated based on the cross-comparison of the intertemporal optimization models REMIND-R and WITCH as well as the recursive dynamic computable general equilibrium model IMACLIM-R. The models applied in the project differ in several respects and the comparison exercise tracks differences in the business as usual forecasts as well as in the mitigation scenarios to conceptual differences in the model structures and assumptions. In particular, the models have different representation of the sectoral structure of the energy system. A detailed sectoral analysis conducted as part of this study reveals that the sectoral representation is a crucial determinant of the mitigation strategy and costs. While all models project that the electricity sector can be decarbonized readily, emissions abatement in the non-electric sectors, particularly transport, is much more challenging. Mitigation costs and carbon prices were found to depend strongly on the availability of low-carbon options in the non-electric sectors.
    Keywords: Decarbonization, Energy and Climate Policy
    JEL: Q48 Q58
    Date: 2009–12
  13. By: Margaret Chitiga; Ramos Mabugu; Hélène Maisonnave; Véronique Robichaud; Bernard Decaluwé
    Abstract: A dynamic computable general equilibrium model based on the PEP standard model developed by Decaluwé et al. (2009) is used to evaluate the impacts of the international crisis on the South African economy. However, we have changed some assumptions in order to better represent South African specificities. A major innovation in this regard is the modelling of unemployment and the influence of labour unions on the labour market. Two scenarios encompassing a severe and moderate recession are run. The effects of the crisis on the economy are really quite harsh, even in the moderate recession scenario, both in the short run and the long run. Indeed, the decrease of world prices combined with the drop of world demand lead to a decrease in production for many sectors with consequent laying off of workers. The impact on institutions is also worrying: agents see their income as well as their savings decreasing. The huge drop in firms’ savings has a dire impact on total investment while the huge negative impact on government accounts of protracted slow global growth imply tight public budgets for some time to come. Thus, some gains made by the government prior to the crisis may have been reversed by the economic crisis. It is apparent from the results that the impact of the crisis will drag into the long run with the situation still below what it would have been in the absence of a crisis until 2015.
    Keywords: Dynamic Computable General Equilibrium, Economic Crisis, South Africa
    JEL: D58 O55 F47
    Date: 2009
  14. By: Sophie Thiébaut (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 (EHESS) - CNRS : UMR6579, Unité 912 - INSERM : U912); Andrew Armstrong (NATSEM - National Centre for Social and Economic Modelling); Bruno Ventelou (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 (EHESS) - CNRS : UMR6579, Epidémiologie et Sciences Sociales Appliquées à l'Innovation Médicale - INSERM : U379 - Université de la Méditerranée - Aix-Marseille II)
    Abstract: The Objective of this paper is to test the consequences of changes in health status of future cohorts of French elderly on healthcare expenditures. We value the precise effect of epidemiological and life expectancy changes on health expenditures for 2025 by using a markovian microsimulation model for a representative database of the contemporary cohorts in France. The originality of these simulations holds in the use of an aggregate indicator of morbidity-mortality, capturing a vital risk and making possible to adapt the quantification of the life expectancies by taking into account of a life without incapacity and/or of the presence of severe pathologies. We forecast a reliable range for future national health spending, under different epidemiological scenarios of morbidity: benchmark case (BM), healthy aging (HA), healthy aging and medical progress (AM). We obtain an evaluation of the annual growth rates in health expenditure accounted for solely by aging: +1.18%; +0.95%; +1.38% according to the scenarios BM; HA; AM. In short, the effective decreases in morbidity rates are not sufficient enough to compensate the massive arrival of baby-boomers at elderly age in France for the period 2010- 2025.
    Keywords: health ; health policy ; simulation method ; econometrics ; social security ; planning Models
    Date: 2009–12–30
  15. By: Papa M'B. P. N'Diaye
    Abstract: This paper discusses the potential macroeconomic implications for Hong Kong SAR of accommodative monetary policy in the United States. It shows, through model simulations, that a resumption of the credit channel in Hong Kong SAR has the potential to create inflation in both goods and asset markets. Expansionary financial conditions will likely have a greater impact in fueling asset price inflation, manifested in the model through a strong increase in equity prices. Higher asset prices could, in turn, through a financial accelerator mechanism, lead to further credit expansion and an upward cycle of asset prices and credit. This cycle, if unchecked, can potentially feed into volatility in consumption, output and employment and complicate macroeconomic management. The simulation results suggest there is a role for countercyclical prudential regulations to mitigate the amplitude of the cycle and lessen the financial and macroeconomic volatility associated with an unwinding of the credit-asset price cycle.
    Keywords: Asset prices , Business cycles , Credit expansion , Economic models , Exchange systems , Fiscal policy , Hong Kong Special Administrative Region of China , Monetary policy , Monetary transmission mechanism , United States ,
    Date: 2009–11–19
  16. By: Katarzyna Budnik (National Bank of Poland, Economic Institute); Michal Greszta (National Bank of Poland, Economic Institute; University of Warsaw, Faculty of Economics); Michal Hulej (National Bank of Poland, Economic Institute); Marcin Kolasa (National Bank of Poland, Economic Institute; Warsaw School of Economics); Karol Murawski (National Bank of Poland, Economic Institute); Michal Rot (National Bank of Poland, Economic Institute); Bartosz Rybaczyk (National Bank of Poland, Economic Institute); Magdalena Tarnicka (National Bank of Poland, Economic Institute)
    Abstract: This paper presents the structural macroeconometric model of the Polish economy, NECMOD, which was developed foremost to facilitate implementation of the monetary policy in Poland through a regular delivery of inflation and GDP projections. The model encompasses all major channels of the monetary policy transmission mechanism and is able to deliver a comprehensive account of factors underlying the main economic developments. With its complex labour market structure, explicit incorporation of inflation expectations, distortionary fiscal policy and heterogeneity of the capital stock, NECMOD is able to describe propagation of a range of macroeconomic shocks. As a forecasting and simulation tool, the model is specifically designed to reflect the dynamic nature of a converging economy.
    Date: 2009
  17. By: Gianmarco I.P. Ottaviano (Bocconi University, KITeS, FEEM and CEPR); Gregory Corcos (Norwegian School of Economics and Business Administration); Massimo Del Gatto ("G. d'Annunzio" University and CRENoS); Giordano Mion (LSE, Department of Geography, NBB, CEP and CEPR)
    Abstract: We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial equilibrium model that accounts for a number of real world effects of trade liberalisation: richer availability of product varieties; tougher competition and weaker market power of firms; better exploitation of economies of scale; and, of course, efficiency gains via the selection of the most efficient firms. The model is estimated on E.U. data and simulated in counterfactual scenarios that capture several dimensions of European integration. Simulations suggest that the gains from trade are much larger in the presence of selection effects. Even in a relatively integrated economy as the E.U., dismantling residual trade barriers would deliver relevant welfare gains stemming from lower production costs, smaller markups, lower prices, larger firm scale and richer product variety. We believe our analysis provides enough ground to support the inclusion of firm heterogeneity and selection effects in the standard toolkit of trade policy evaluation.
    Keywords: European Integration, Firm-level Data, Firm Selection, Gains from Trade, Total Factor Productivity
    JEL: F12 R13
    Date: 2009–12
  18. By: NR, Bhanumurthy; Kumawat, Lokendra
    Abstract: Though a large number of structural macroeconometric models have been estimated for India, the fact that all these are based on annual data limit their usefulness for short-term policy analysis, particularly in volatile periods of the type seen during last few quarters. Therefore the present paper builds up a short-term macroeconometric model for India using quarterly data. The model has reasonably good in-sample performance. One important feature of the model is use of quadratic relation between government expenditure and credit to private sector, which shows presence of both crowding in and crowding out effects, the latter dominating the former when expenditure is high enough. Some simulations are also carried out to analyse the impact of recent external shocks such as rise in global food and fuel prices and the global financial meltdown, on the Indian economy. The results show that the current slowdown in India’s growth predates the global price shock and the global financial crisis, and is more of a regular cyclical downturn. The global developments only further deepen the slowdown and prolong the recovery.
    Keywords: Structural model; External Shocks; India
    JEL: C51 C53 C52 E19
    Date: 2009–11
  19. By: Palmer, Karen (Resources for the Future); Burtraw, Dallas (Resources for the Future); Paul, Anthony (Resources for the Future)
    Abstract: The regulation of greenhouse gas emissions from the electricity sector within a cap-and-trade system poses significant policy questions about how to allocate tradable emission allowances. Allocation conveys tremendous value and can have efficiency consequences. This research uses simulation modeling for the electricity sector to examine different approaches to allocation under a cap-and-trade program in California. The decision affects prices and other aspects of the electricity sector, as well as implications for the overall cost of climate policy. An important issue is the opportunity for emission reductions in California to be offset by emission increases in neighboring regions that supply electricity to the state. The amount of emission leakage (i.e. an increase in CO2 emissions outside of California as a result of the program) varies with the regulatory design of the program.
    Keywords: cap-and-trade, electricity generation, electricity sector, emissions, regulation, governance, allocation, California
    JEL: Q2 Q25 Q4 L94
    Date: 2009–10–07
  20. By: Aguilar, Juan Francisco
    Abstract: The present project is related in the measurement of the risk and the improvement of the processes of monetary species. The main objective is to offer a methodology in the tickets administration because understanding of history is a situation that becomes in an advantage on the opportunities at the market. The model is based on the use of a computer science tool to determine the suitable level of import and export of remittances and thus determine a level adapted in cost of maintaining balances in vaults, remittances and income by management of investments. Finally, I realize a simulation in order to validate the results, quantify the shortage probability, and determine sensible periods of scarcity.
    Keywords: Gestión de Inventarios; Costes de mantenimiento; Costes de pedidos; Costes de Ruptura; Stock de Seguridad; Modelos de Series de Temporales; Métodos Metaheurísticos; Optimización
    JEL: C32 D81 C3 G32 C61 C22 C2
    Date: 2009–10–02
  21. By: Arpino, Bruno; Varriale, Roberta
    Abstract: The aim of this paper is to assess the quality of the ranking of institutions obtained with multilevel techniques in presence of different model misspecifications and data structures. Through a Monte Carlo simulation study, we find that it is quite hard to obtain a reliable ranking of the whole effectiveness distribution while, under various experimental conditions, it is possible to identify institutions with extreme performances. Ranking quality increases with increasing intra class correlation coefficient and/or overall sample size. Furthermore, multilevel models where the between and within cluster components of first-level covariates are distinguished perform significantly better than both multilevel models where the two effects are set to be equal and the fixed effect models.
    Keywords: Multilevel models; ranking of institutions; second-level residuals distribution
    JEL: I2 C15
    Date: 2009
  22. By: Chen, Min
    Abstract: Random Utility Models of recreation demand are widely used to relate demand and value to the characteristics of recreation sites. Although some kinds of endogeneity problems have been studied in previous literature, no study has addressed the potential problem with site characteristics that are endogenously supplied. Some site characteristics, like facilities, could be endogenous in an economic sense due to the interplay of supply and demand. That is, more popular recreation sites tend to have better site characteristics since managers with limited budgets would be more willing to invest in them. If recreation site improvements are more likely to occur at the more popular sites, then this economic endogeneity might cause problems for econometric models linking site demand to facilities. In this paper, we use Monte Carlo simulations to investigate under what situations this economic endogeneity will lead to statistical endogeneity.
    Keywords: Random Utility Maximization models, Facilities, Endogeneity, Monte Carlo simulations, Environmental Economics and Policy, Q51,
    Date: 2009
  23. By: Carlos Daniel Santos
    Abstract: Sunk costs for R&D are an important determinant of the level of innovation in the economy.In this paper I recover them using a Markov equilibrium framework. The contribution istwofold. First, a model of industry dynamics which accounts for selection into R&D, capitalaccumulation and entry/exit is proposed. The industry state is summarized by an aggregatestate with the advantage that it avoids the "curse of dimensionality". Second, the estimatedsunk costs of R&D for the Portuguese moulds industry are shown to be important (3.4 millionEuros). They become particularly relevant since the industry is mostly populated by smallfirms. Institutional changes in the early 1990s generated an increase in demand fromEuropean car makers and created the incentives for firms to pay the costs of investment.Trade-induced innovation reinforced the selection effect by which international trade leads toproductivity growth. Finally, using the estimated parameters, simulations evaluate the effectsof changes in market size, sunk costs and entry costs.
    Keywords: Aggregate state, industry dynamics, Markov equilibrium, moulds industry, R&D,structural estimation, sunk costs
    JEL: C61 D21 D92 L11 L22 O31
    Date: 2009–11
  24. By: Paulus A; Čok M; Figari F; Hegedüs P; Kump N; Lelkes O; Levy H; Lietz C; Lüpsik S; Mantovani D; Morawski L; Sutherland H; Szivos P; Võrk A
    Abstract: Tax and benefit systems in the enlarged EU vary significantly in size and structure. We examine how taxes and benefits shape income distributions in 19 EU countries, focusing on the differences between Western European countries (EU15) and Eastern European countries (Estonia, Hungary, Poland, Slovenia). We use EUROMOD, the European tax-benefit microsimulation model, which simulates taxes and benefits for representative samples of household micro-data and through a common framework which allows the analysis of cross-country differences on a comparable basis. The analysis concentrates on the distribution and composition of incomes, and the effect of taxes and benefits on poverty and inequality
    JEL: C81 D31 P50
    Date: 2009–12–18
  25. By: Ricardo Barros; Mirela de Carvalho; Samuel Franco; Rosane Mendonça
    Abstract: Os extraordinários acontecimentos havidos no país entre 2001-2007, com uma queda acentuada da desigualdade e dos níveis de pobreza e de extrema pobreza nos oferecem uma oportunidade única de estudarmos os fatores mais relevantes para explicar as mudanças em favor dos mais pobres e em diferentes cenários ? com e sem crescimento econômico. Assim, em primeiro lugar, com base em uma série de simulações contrafactuais, quantificamos a contribuição destes fatores determinantes para a queda i) na desigualdade; ii) na porcentagem de pobres; iii) no hiato médio de pobreza; e iv) na severidade da pobreza. Como entre 2001 e 2003 não houve redução na pobreza, investigamos apenas a contribuição dos fatores determinantes para a queda na pobreza e na extrema pobreza para o subperíodo 2003-2007. Os resultados obtidos demonstram que as melhorias na distribuição de renda derivada do trabalho por trabalhador e na renda não derivada do trabalho foram os principais fatores responsáveis. As mudanças demográficas, que foram mais favoráveis para os mais pobres, também se destacam quando analisamos a redução na pobreza. Em segundo lugar, investigamos em que medida os graus de discriminação e de segmentação no mercado de trabalho declinaram ao longo dos últimos anos, e quantificamos suas contribuições para a recente redução do grau de desigualdade em renda do trabalho e em renda per capita no país. Os resultados revelaram que, em conjunto, a redução nas diversas formas de discriminação e segmentação investigadas explica 19% da queda na desigualdade em remuneração do trabalho e 9% da queda em renda per capita. TThe extraordinary events that occurred in the country between 2001-2007, with a sharp decline in inequality and the levels of poverty and extreme poverty offers a unique opportunity to examine the most relevant factors to explain changes that benefit the poor and in different scenarios ? with and without economic growth. First, based on a series of counter-factual simulations, we estimate the contribution of these factors to the decline i) in inequality; ii) the percentage of poor; iii) the average gap of poverty; and iv) the severity of poverty. Once that between 2001 and 2003 there was no reduction in poverty, we investigated the contribution of the determining factors for the decline in poverty and extreme poverty only in the subperiod 2003-2007. The results show that the improvements in the distribution of income derived from work per worker and income not derived from the work were the main factors responsible. Demographic changes, which were more favorable to the poor, also stand out when analyzing the reduction in poverty. Secondly, we investigated the extent to which degrees of discrimination and segmentation in the labor market declined in recent years, and quantified their contribution to the recent reduction in the degree of inequality in labor income and per capita income in the country. The results showed that, together, the reduction in various forms of discrimination and segmentation explains 19% of the decrease.
    Date: 2010–01

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