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on Computational Economics |
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Issue of 2010‒06‒26
twelve papers chosen by |
| By: | Zaki, Chahir; Hendy, Rana |
| Abstract: | This paper aims at evaluating the liberalization policies effects on inequality in Egypt with respect to gender, region and qualification level. No previous studies in Egypt, to our best knowledge, have used the Microsimulation analysis which is a good tool that allows such an evaluation and determines the redistribution aspects of macro policies. The latter consists of linking macroeconomic changes to the micro level of the economy i.e. the individual level. A Computable General Equilibrium model (CGE) is first estimated for a maximum tariff rate of 10%. And, wages and employment changes resulted from the CGE are replicated, in a second stage, into our micro data. Results show that liberalization policies have important impacts on inequalities among the Egyptian population in general. Inequality has decreased among males and females as well as among different regions of the Egyptian society but has increased among high-skilled and low-skilled workers. Results of the present research have important policy implications that have to be considered. |
| Keywords: | Trade liberalization; Egypt; CGE |
| JEL: | F16 J01 D58 J16 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23354&r=cmp |
| By: | Nadia Belhaj Hassine (Economic Research Forum); Veronique Robichaud; Bernard Decaluwé |
| Abstract: | Computable General Equilibrium (CGE) models have gained popularity as an empirical tool for assessing the impact of trade liberalization on agricultural growth, poverty and income distribution. However, conventional models ignore the channels linking technical change in agriculture, trade openness and poverty. This study seeks to incorporate econometric evidence of these linkages into a CGE model to estimate the impact of alternative trade liberalization scenarios on welfare, poverty and equity. The analysis uses the Latent Class Stochastic Frontier Model (LCSFM) and the metafrontier function to investigate the influence of trade openness on agricultural technological change. The estimated productivity gains induced from higher levels of trade are combined with a general equilibrium analysis of trade liberalization to evaluate the direct welfare benefits of poor farmers and the indirect income and prices outcomes. These effects are then used to infer the impact on poverty using the traditional top-down approach. The model is applied to Tunisian data using the social accounting matrix of 2001 and the 2000 household expenditures surveys. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:519&r=cmp |
| By: | Sami Bibi; John Cockburn; Luca Tiberti; Ismaël Fofana; Paul Ningaye; Christian Arnault Emini; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO) |
| Abstract: | This study aims to evaluate the potential impacts of the 2008/09 global economic crisis on child poverty in Cameroon. It also explores the potential effects that policy responses to such a crisis could have on children. In order to do this, the study uses a macro-micro methodology. A dynamic computable general equilibrium (CGE) model is used to simulate various scenarios of the economic crisis together with policies which respond to the crisis, taking into account the different transmission channels of the global crisis to the Cameroonian economy. The results of the CGE model are then used in a micro-econometric module in order to evaluate the impacts of the simulated shocks on households in general and children in particular. Five dimensions of child poverty are examined: monetary poverty, caloric poverty, child school participation and child labour, and children’s access to health care services. The study shows that the crisis is projected to lower the real GDP growth rate by 1.3 percentage points in 2009, 0.9 in 2010 and 0.8 in 2011. The crisis would also bring about a 1.05% increase in the number of children who were poor in monetary terms in 2008 and a 4% increase in 2009, 2010 and 2011, compared to the situation without a crisis. With respect to this reference scenario, the crisis is simulated to increase the number of children who are poor in caloric terms by 0.56% in 2009, 1.08% in 2010 and 1.60% in 2011, and negatively affects, albeit lightly, both children’s school participation rate and their access to health care services. Four alternative policy responses to the crisis are simulated: a reduction in the VAT levied on the sale of food products; elimination of customs tariffs applied on imports of food products; free access to school canteens for children under the age of 15 in districts where monetary poverty is higher than the national average; and granting cash transfers to poor children. These policies, with a cost of 1%, 0.4%, 0.19% and 1% of Cameroon’s before-crisis GDP respectively, are financed either by foreign aid or by draining the state’s foreign reserves. Results from these simulations show that, in terms of poverty reduction, cash transfers appear to be the most effective of the four policy responses mentioned above, but this policy is the most ineffective at improving the real GDP growth rate. At the national level, the cash transfer policy completely counters the increase in monetary and caloric poverty engendered by the crisis over the entire period of the study. It even lowers these two types of poverty to less than the situation where the crisis did not occur. Moreover, these transfers have beneficial, although small, effects on children’s school and labour participation rates. Furthermore, beside the cash transfer policy, the subsidy for school canteens has a relatively low cost but carries fairly considerable benefits in response to the crisis, especially in alleviating caloric poverty; while the other two policies are quite ineffective, regardless of which dimension of poverty is considered. |
| Keywords: | child education; child health; child labour; child poverty; econometric models; economic crisis; hunger; social protection; |
| JEL: | I32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:inwopa:inwopa598&r=cmp |
| By: | Zaki, Chahir |
| Abstract: | This paper develops a dynamic computable general equilibrium (CGE) model incorporating trade facilitation aspects. This paper’s contributions are twofold: theoretical and empirical. First, this paper attempts to model trade facilitation explicitly in a dynamic CGE model applied. On the empirical side, I estimate, not assume, the tariff equivalent of red tape and related procedures at sectoral level. I use the ad valorem tariff equivalents of time to import and to export that have been estimated in a companion paper and I take into account the cost of such a process. To do so, I modify the Exter model that is calibrated on the Egyptian social accounting matrix of 2000/2001. My main findings show that, when trade facilitation is modeled precisely, i.e. by taking into account its cost as well as the tariff equivalents of its aspects, the impact of such a process is reduced. Meanwhile, its impact remains higher than trade liberalization. Moreover, some sectors witness a significant expansion more than others, especially processed food, garments and high value added products. |
| Keywords: | CGE; Trade facilitation; Egypt |
| JEL: | F11 F14 D58 |
| Date: | 2010–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23353&r=cmp |
| By: | Huifang Tian; John Whalley |
| Abstract: | We report numerical simulation results using a multiyear global multi country modeling framework which we use to assess the impacts of alternative emissions cuts which will likely come under consideration for the process to follow the December 2009 UNFCCC negotiation in Copenhagen. The Copenhagen Accord sets out prior country unilateral commitments, and provides a framework for further negotiation of mutually agreed cuts. We also consider possible financial transfers under the Adaptation Fund and possible trade linked border measures against non participants. Countries are linked not only through shared impacts of global temperature change but also through trade among country subscripted goods. We can thus evaluate the potential impacts of either explicit or implicit accompanying mechanisms including funds/transfers, border adjustments, and tariffs. We calibrate the model to alternative BAU damage scenarios largely as set out in the Stern report. The welfare impacts of both emission reductions and accompanying measures are computed in Hicksian money metric equivalent form over alternative potential commitment periods: 2012-2020, 2012-2030, and 2012-2050. We consider different depth, forms, and timeframes for reductions by China, India, Russia, Brazil, US, EU, Japan and a residual Row. Given the damage estimates we use all countries lose from joint reductions since their foregone consumption is more costly than saved damage from reduced climate change. With the use of larger damage estimates this reverses the depth of cut and allocation of cuts by country cause large differences in impacts by country, while differences in form of cut (intensity, embedment) matter less. Accompanying mechanisms also can make a large difference to participation decisions and especially for large population, low wage, rapidly growing non OECD countries, but are costly for the OECD countries. This all suggests that the bargaining set for the post Copenhagen process is very large, making an eventual jointly agreed outcome difficult to achieve. |
| JEL: | F01 F51 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16090&r=cmp |
| By: | Antonis Papapantoleon; David Skovmand |
| Abstract: | The aim of this work is to provide fast and accurate approximation schemes for the Monte-Carlo pricing of derivatives in the L\'evy LIBOR model of Eberlein and \"Ozkan (2005). Standard methods can be applied to solve the stochastic differential equations of the successive LIBOR rates but the methods are generally slow. We propose an alternative approximation scheme based on Picard iterations. Our approach is similar in accuracy to the full numerical solution, but with the feature that each rate is, unlike the standard method, evolved independently of the other rates in the term structure. This enables simultaneous calculation of derivative prices of different maturities using parallel computing. We include numerical illustrations of the accuracy and speed of our method pricing caplets. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1006.3340&r=cmp |
| By: | Tao Xiang; Jikun Huang; d’Artis Kancs; Scott Rozelle; Jo Swinnen |
| Abstract: | We analyze the effects of high standards food chains on household welfare taking into account general equilibrium effects and market imperfections. To measure structural production changes and welfare effects on rural and urban households, our model has two types of agents, five kinds of products and four types of factors. We calibrate the model using dataset from China. The simulation results show that how poor rural households are affected depends on a variety of factors, including the nature of the shocks leading to the expansion of high standards sector, production technologies, trade effects, spillover effects on low standards markets, market imperfections, and labor market effects. |
| JEL: | J11 J15 Y80 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:26310&r=cmp |
| By: | John Cockburn; Luca Tiberti; Ismaël Fofana |
| Abstract: | The current global financial and economic crisis, which exacerbates the impacts of the energy and food crises that immediately preceded it, has spread to the developing countries endangering recent gains in terms of economic growth and poverty reduction. The effects of the crisis are likely to vary substantially between countries and between individuals within the same country. Children are among the most vulnerable population, particularly in a period of crisis. Especially in least developed countries, where social safety nets programs are missing or poorly performing and public fiscal space is extremely limited, households with few economic opportunities are at a higher risk of falling into (monetary) poverty, suffering from hunger, removing children from school and into work, and losing access to health services. This study simulates the impacts of the global economic crisis and alternative policy responses on different dimensions of child welfare in Western and Central Africa (WCA) over the period 2009-2011. It is based on country studies for Burkina Faso, Cameroon, and Ghana, which broadly represent the diversity of economic conditions in WCA countries. In order to capture the complex macro-economic effects of the crisis and the various policy responses - on trade, investment, remittances, aid flows, goods and factor markets - and to then trace their consequences in terms of child welfare - monetary poverty, hunger (caloric poverty), school participation, child labour, and access to health services - a combination of macro- and micro-analysis was adopted. The simulations suggest that the strongest effects are registered in terms of monetary poverty and hunger, although large differences between countries emerge. More moderate impacts are predicted in terms of school participation, child labour, and access to health care, although these are still significant and require urgent policy responses. Specifically, Ghana is the country where children are predicted to suffer the most in terms of monetary poverty and hunger, while Burkina Faso is where the largest deteriorations in schooling, child labour and access to health services are simulated. Among the policy responses examined to counteract the negative effects of the crisis on child wellbeing, a targeted cash transfer to predicted poor children is by far the most effective program. A comparison between a universal and targeted approach is also presented. |
| Keywords: | child education; child health; child poverty; child well-being; economic crisis; hunger; |
| JEL: | I32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:inwopa:inwopa596&r=cmp |
| By: | John Cockburn; Luca Tiberti; Ismaël Fofana; Theodore Antwi-Asare; Edgar A. Cooke; Daniel K. Twerefou; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO) |
| Abstract: | Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study. The global crisis is also predicted to severely deepen hunger among children, which is simulated to increase up to 6.6 percentage points in 2011 beginning with a sharp increase already in 2009. For both monetary poverty and hunger, the impact of the crisis differs across all regions, with the Eastern, Volta and Greater Accra regions predicted to be the most affected. Children’s participation in schooling and labour, as well as their access to health services, are forecast to be much less affected by the crisis, although it is found to reverse predicted increases in enrolment and health access (with substitution toward more modern types of health services) and forecasted reductions in child labour. Finally, alternative policy options have been simulated: a cash transfer programme targeted to poor children is found to be generally more effective in protecting children than food subsidies. Indeed, with a total budget equivalent to 1% of 2008 GDP, a cash transfer - equivalent to an individual annual amount of 19.8 Cedis - would cut the predicted increase in monetary poverty by over two percentage points in 2011. Although Ghana might be in a position to rapidly implement a cash transfer programme building on the existing Livelihood Empowerment against Poverty (LEAP) programme, other interventions (or mix of policies) might be more cost-effective in the short run. A combination of a universal or regionally targeted cash transfer programmes for children aged 0 to 5 years old, together with a school-feeding programme in poorer regions, might represent an effective way to intervene quickly to improve child well-being. |
| Keywords: | child education; child health; child labour; child poverty; econometric models; economic crisis; hunger; social protection; |
| JEL: | I32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:inwopa:inwopa601&r=cmp |
| By: | Magid Maatallah (The Financial Mathematics Research Group at King's College - King's College London, Birkbeck College - University of London) |
| Abstract: | We construct proxy regions based on local time arguments and consider numerical approximations. These are then available for a more incisive assessment of the Monte Carlo procedure and thence of the estimate itself. |
| Date: | 2009–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00492440_v1&r=cmp |
| By: | David Stern (Arndt-Corden Division of Economics, Crawford School of Economics and Government, Australian National University, and Centre for Applied Macroeconomic Analysis, Canberra, Australia); Ross Lambie (Crawford School of Economics and Government, Australian National University, Australia. Australian National University) |
| Abstract: | The relative cost of carbon emissions reductions across regions depends on whether we measure cost by marginal or total cost, private or economy-wide cost, and using market or purchasing power parity exchange rates. If all countries are on the same marginal carbon abatement cost curve then lower marginal costs of abatement are associated with higher energy intensities and higher total costs of abatement in achieving proportional cuts in emissions, equal emissions per capita, or common global carbon price targets. We test this conjecture using the results of the GTEM computable general equilibrium model as presented in the climate change economics review conducted by the Australian Treasury Department. Rankings of countries by costs do differ depending on whether marginal or total cost is used. But some regions, including OPEC and the former USSR, have high marginal costs and high emissions intensities and, therefore, high total costs and others like the EU relatively low marginal and total costs. Under a global emissions trading regime real economy-wide costs of abatement are higher in developing economies with currencies valued below purchasing power parity and large differences between private and economy-wide costs such as India contributing to the high GDP losses experienced in those countries. |
| Keywords: | Climate change, costs, developing countries, computable general equilibrium |
| JEL: | Q52 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1063&r=cmp |
| By: | Juan Esteban Carranza |
| Abstract: | This paper contains an empirical dynamic model of supply and demand in the market for digital cameras with endogenous product innovation. On the demand side, heterogeneous consumers time optimally the purchase of goods depending on the expected evolution of prices and characteristics of available cameras. On the supply side, firms introduce new camera models accounting for the dynamic value of new products and the optimal behavior of consumers. The model is estimated using data from the market for digital cameras and the estimated model replicates rich dynamic features of the data. The estimated model is used to perform counterfactual computations, which suggest that more competition or lower product introduction costs generate more product variety but lower average product quality. |
| Date: | 2010–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:col:000130:007127&r=cmp |