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on Computational Economics |
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Issue of 2011‒03‒05
eighteen papers chosen by |
| By: | V. VAN PETEGHEM; M. VANHOUCKE |
| Abstract: | In this paper, an Invasive Weed Optimization (IWO) algorithm for the Resource Availability Cost Problem (RACP) is presented, in which the total cost of the (unlim- ited) renewable resources required to complete the project by a pre-specified project deadline should be minimized. The IWO algorithm is a new search strategy, which makes use of mechanisms inspired by the natural behavior of weeds in colonizing and finding a suitable place for growth and reproduction. In this paper, the algorithm is used for the first time to solve a project scheduling problem. All algorithmic compo- nents are explained in detail and computational results for the RACP are presented. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:11/697&r=cmp |
| By: | Miller, Ana Corina; Matthews, Alan; Boysen, Ole; Donnellan, Trevor; O'Donoghue, Cathal |
| Abstract: | The purpose of this paper is to assess the impacts of further trade liberalisation on the agricultural sector in Ireland. In addition to evaluating the aggregate impacts on agricultural production as well as the spill-over effect of this on the non-agricultural sector and for overall Irish GDP, we evaluate the effects for different types of households. In order to capture economy-wide impacts of the policy reform, a CGE model was formulated and implemented using a social accounting matrix constructed for Ireland for the year 2005. Household effects are captured using representative households. The simulation results suggest a positive impact on the Irish economy as well as on the representative households. Many agricultural sectors contract in the process but a more efficient reallocation of resources into manufacturing and services sectors more than compensates those losses. |
| Keywords: | Trade policy, CAP reform, CGE model, Macro and welfare effects, Agricultural and Food Policy, International Relations/Trade, F13, D58, I3, |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99598&r=cmp |
| By: | Calabrese, Chiara; Mack, Gabriele |
| Abstract: | This paper analyses different direct payments system for the Swiss alpine region based on the multi-agent model SWISSland. Moreover, the future demand and management of the alpine pastures are simulated under different scenarios until 2020. In the model, agents are representing existing summer farms and are able to interact with each other. The results imply that the current direct payment system for the Swiss alpine region is effective and able to maintain a stable development until 2020. Since the land management in the alpine region is the activity that provides public goods, it would be reasonable to enforce payments that maximize the area of summered land. A change to contributions coupled to the surfaces could achieve the desired management of the alpine pastures meaning, at the same time, a need of proper monitoring systems. |
| Keywords: | multi-agent models, policy analysis, simulation, alpine region, Agricultural and Food Policy, C16, Q18., |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99370&r=cmp |
| By: | Bårdsen, Gunnar (Department of Economics); den Reijer, Ard (Monetary Policy Department, Central Bank of Sweden); Jonasson, Patrik (Monetary Policy Department, Central Bank of Sweden); Nymoen, Ragnar (Department of Economics) |
| Abstract: | MOSES is an aggregate econometric model for Sweden, estimated on quarterly data, and intended for short-term forecasting and policy simulations. After a presentation of qualitative model properties, the econometric methodology is summarized. The model properties, within sample simulations, and examples of dynamic simulation (model forecasts) for the period 2009q2-2012q4 are presented. We address practical issues relating to operational use and maintenance of a macro model of this type. The detailed econometric equations are reported in an appendix. |
| Keywords: | macroeconomic model; policy analysis; general-to-specific modelling |
| JEL: | E12 E66 |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0249&r=cmp |
| By: | John Gilbert (Department of Economics and Finance, Utah State University); Robert Scollay; Bijit Bora |
| Abstract: | Using both a gravity model to consider the natural trading bloc hypothesis, and simulation using a CGE model to make welfare estimates, we examine the potential effect of a subset of the new RTA proposal in the APEC region. In broad terms the two approaches appear consistent in their ability to identify RTAs that are beneficial in terms of the welfare of the proposed members. However, comparison of the two alternative approaches does not lead to support for the hypothesis that natural blocs are less likely to be damaging to those economies that remain on the outside of the new proposals. |
| Keywords: | Trade policy, Asia, CGE |
| JEL: | F13 F15 C21 C68 |
| Date: | 2011–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:uth:wpaper:200101&r=cmp |
| By: | Banse, Martin; Van Leeuwen, Myrna; Tabeau, Andrzej; Salamon, Petra; von Ledebur, Oliver |
| Abstract: | The paper investigates the CAP impacts on the EU agriculture by means of policy simulations conducted with the AGMEMOD model. To isolate the policy effects in the historical period 2000-2005, counterfactual simulations for this period are run. To simulate the response of the EU agriculture on different policy changes in the period 2006-2020, a âno-policy changeâ baseline scenario is developed and then policy experiments are conducted such as the abolition of milk quota, the implementation of the regional payments and some budget cuts. To identify the policy effects, the policy scenarios are compared with the âno-policy changeâ baseline. |
| Keywords: | CAP Reform, ex-post evaluation, agricultural sector modelling, Agricultural and Food Policy, |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99366&r=cmp |
| By: | Niemi, Jyrki S.; Kettunen, Lauri |
| Abstract: | The objective of this paper is to assess empirically the impacts of further reform of the Common Agricultural Policy (CAP) on the agri-food sector in Finland. To meet the objective, an econometric model for Finnish agriculture - built as a part of the AGMEMOD project - was utilised. The projection and policy simulations presented in the paper demonstrate that the model provides the basis for relatively straightforward baseline projection, and an initial framework for agricultural policy analysis. Yet, there remains substantial scope for further work on the model. In particular, the effects of big policy shocks are clearly not adequately captured by the model. The linear equations of supply together with low elasticities estimated from historical data generate simulation results, which do not in our opinion fully capture farmersâ reactions to these changes. |
| Keywords: | policy analysis, econometric models, Finland, commodity markets, Agricultural and Food Policy, C54, E17, Q18., |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99367&r=cmp |
| By: | Kristkova, Zuzana; Ratinger, Tomas; Majerova, Jana |
| Abstract: | Capturing agricultural multifunctionality challenges agricultural economists for more than a decade. On one hand, researchers increasingly build in their commodity based models provision of environmental protection and landscape maintenance, on the other hand, there are efforts as contingence valuation to assess the economic value of environmental benefits provided by agriculture. This paper and the corresponding research tries to merge the both research streams by incorporating supply and demand of landscape public good in the CGE framework. The former is done by including an explicit sector of joint commodity and noncommodity production in the model structure, the latter by extending the household demand system of willingness to pay for landscape. The approach is tested on four scenarios which are extensively compared. |
| Keywords: | Environmental public goods, agri-environmental policy, CGE models, Agricultural and Food Policy, Environmental Economics and Policy, Q11, Q15, Q18, |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99422&r=cmp |
| By: | Bussière, M.; Pérez-Barreiro, E.; Straub, R.; Taglioni, D. |
| Abstract: | In this paper we take a systematic look at recent trends in global protectionism and at the potential implications of a protectionist backlash for economic growth, using results from the recent economic literature and new model simulations. We find that there has so far been a moderate increase in actual protectionist measures to restrict trade through tariff and non-tariff barriers. At the same time, evidence from surveys shows that public pressure for more economic protection has been mounting since the mid-2000s, and has possibly intensified since the start of the financial crisis. However, no World Trade Organization (WTO) member has retreated into widespread trade restrictions or protectionism to date. Our model-based simulations suggest that the impairment of the global flow of trade would hamper the recovery from the crisis, as well as the long-term growth of the global economy. At the same time, it is unlikely that protectionism would help to correct existing current account imbalances. Moreover, the countries implementing protectionist measures should expect a deterioration of their international competitiveness, which would further affect the potential for longer-term real GDP growth. |
| Keywords: | Protectionism ; trade ; financial crisis ; competitiveness ; World Trade Organization ; global imbalances. |
| JEL: | F13 F15 F21 F53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:319&r=cmp |
| By: | Alexander F. R. Koivusalo; Rudi Sch\"afer |
| Abstract: | In recent years research on credit risk modelling has mainly focused on default probabilities. Recovery rates are usually modelled independently, quite often they are even assumed constant. Then, however, the structural connection between recovery rates and default probabilities is lost and the tails of the loss distribution can be underestimated considerably. The problem of underestimating tail losses becomes even more severe, when calibration issues are taken into account. To demonstrate this we choose a Merton-type structural model as our reference system. Diffusion and jump-diffusion are considered as underlying processes. We run Monte Carlo simulations of this model and calibrate different recovery models to the simulation data. For simplicity, we take the default probabilities directly from the simulation data. We compare a reduced-form model for recoveries with a constant recovery approach. In addition, we consider a functional dependence between recovery rates and default probabilities. This dependence can be derived analytically for the diffusion case. We find that the constant recovery approach drastically and systematically underestimates the tail of the loss distribution. The reduced-form recovery model shows better results, when all simulation data is used for calibration. However, if we restrict the simulation data used for calibration, the results for the reduced-form model deteriorate. We find the most reliable and stable results, when we make use of the functional dependence between recovery rates and default probabilities. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1102.4864&r=cmp |
| By: | Kimmo Marttila; Juha Honkatukia |
| Abstract: | Abstract This study evaluates the effects of changes in energy taxes on energy consumption between the years 1995 and 2004 using an applied, general equilibrium model for a historical simulation. During this period, Finnish energy taxation was fundamentally changed, going from an up-stream, emission and energy content-based approach to one with a mixed fuel and electricity tax. The change put the burden more closely on the users of electricity and fuels. We find that while the sharp increases in energy prices since 1995 have significantly restricted the growth of energy demand, energy taxes have also been effective in curbing the growth of energy and especially electricity consumption. For transport fuels, the effective tax rate actually fell as the price net of tax increased over time. Nevertheless, for petrol and light fuel oil we do find the taxes to have slowed down overall demand growth. |
| Keywords: | Energy taxes, emission, economic growth |
| Date: | 2011–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:fer:resrep:162&r=cmp |
| By: | Traian A Pirvu; Huayue Zhang |
| Abstract: | This paper considers the optimal portfolio selection problem in a dynamic multi-period stochastic framework with regime switching. The risk preferences are of exponential (CARA) type with an absolute coefficient of risk aversion which changes with the regime. The market model is incomplete and there are two risky assets: one tradable and one non-tradable. In this context, the optimal investment strategies are time inconsistent. Consequently, the subgame perfect equilibrium strategies are considered. The utility indifference prices of a contingent claim written on the risky assets are computed via an indifference valuation algorithm. By running numerical experiments, we examine how these prices vary in response to changes in model parameters. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1102.5075&r=cmp |
| By: | Nicola Barban; Francesco Billari |
| Abstract: | In this article we compare two techniques that are widely used in the analysis of life course trajectories, latent class analysis (LCA) and sequence analysis (SA). In particular, we focus on the use of these techniques as devices to obtain classes of individual life course trajectories. We first compare the consistency of the classification obtained via the two techniques using an actual dataset on the life course trajectories of young adults. Then, we adopt a simulation approach to measure the ability of these two methods to correctly classify groups of life course trajectories when specific forms of "random" variability are introduced within pre-specified classes in an artificial dataset. In order to do so, we introduce simulation operators that have a life course and/or observational meaning. Our results contribute on the one hand to outline the usefulness and robustness of findings based on the classification of life course trajectories through LCA and SA, on the other hand to illuminate the potential pitfalls of actual applications of these techniques. |
| Keywords: | sequence analysis; latent class analysis; life course analysis; categorical time series |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:041&r=cmp |
| By: | Rob Hodgson (Department of Labour); Jacques Poot (University of Waikato) |
| Abstract: | This paper brings together the key research findings of some 20 projects conducted in New Zealand on the economic impacts of immigration from 2005 to 2010. Besides providing a synthesis of this research, knowledge gaps that could be addressed in future research are also identified. The report concludes that immigration has made a positive contribution to economic outcomes in New Zealand and that fears for negative economic impacts such as net fiscal costs, lower wages, and increasing unemployment find very little support in the available empirical evidence. Moreover, the economic integration of immigrants is broadly successful. Once migrants are in New Zealand for more than 10–15 years, their labour market outcomes are predominantly determined by the same success factors as those for the New Zealand born. Migration increases trade and tourism, both inbound and outbound. The net fiscal impact of immigration is positive. Findings on impacts on housing and on technological change are less conclusive. Simulations over a 15-year period with a CGE model suggest that even without additional technological change, additional immigration raises gross domestic product (GDP) per capita, albeit only modestly. Conversely, without net immigration, GDP per capita would be less. The CGE model simulations also suggest that changes in immigration policy and changes in the New Zealand economy over the last quarter century now yield greater economic benefits from immigration than in the past. Future research should focus on: the path of adjustment of the economy over time, following a change in the level of immigration; physical and human capital investment in the economy triggered by immigration; the economic consequences of greater diversity; and differences in impacts between temporary and long-term migration. |
| Keywords: | Migration, institutions, democracy, diaspora effects, brain drain. |
| JEL: | O1 F22 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201104&r=cmp |
| By: | Viaggi, Davide; Raggi, Meri; Sardonini, Laura |
| Abstract: | In evaluating the potential effects of the reforms of the Common Agricultural Policy, a particularly challenging issue is the representation of the complexity of rural systems either in a static or dynamic framework. In this paper we use Bayesian networks, to the best knowledge of the authors, basically ignored by the literature on rural development. The objective of this paper is to discuss the potential use of Bayesian Networks tools to represent the multiple determinants and impacts of the Common Agricultural Policies in rural areas across Europe. The analysis shows the potential use of BNs in terms of representation of the multiple linkages between different components of rural areas and farming systems, though its use as a simulation tool still requires further improvements. |
| Keywords: | Bayesian Networks (BNs), farm-household, multiple outcomes, Agricultural and Food Policy, Q1, Q18, |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa122:99592&r=cmp |
| By: | Privileggi, Fabio |
| Abstract: | This paper provides a step further in the computation of the transition path of a continuous time endogenous growth model discussed by Privileggi (2010) – based on the setting first introduced by Tsur and Zemel (2007) – in which knowledge evolves according to the Weitzman (1998) recombinant process. A projection method, based on the least squares of the residual function corresponding to the ODE defining the optimal policy of the 'detrended' model, allows for the numeric approximation of such policy for a positive Lebesgue measure range of values of the efficiency parameter characterizing the probability function of the recombinant process. Although the projection method's performance rapidly degenerates as one departs from a benchmark value for the efficiency parameter, we are able to numerically compute time-path trajectories which are sufficiently regular to allow for sensitivity analysis under changes in parameters' values. |
| Keywords: | Knowledge Production, Endogenous Recombinant Growth, Transition Dynamics, Projection Methods, Least Squares. |
| JEL: | C61 C63 O31 O41 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:153&r=cmp |
| By: | Ana-Isabel Guerra (Department of Economics, Universidad Pablo de Olavide); Ferran Sancho (Department of Economics, Universidad Autónoma de Barcelona) |
| Abstract: | We reconsider in this paper the alleged implausibility of Ghosh’s model and we do so reformulating the model to incorporate an alternative closure rule. Our proposed closure rule is in line with the original allocation rules defined by A. Ghosh. The closure solves, to some extent, the implausibility problem that was pointed out by Oosterhaven for then value–added is correctly computed and responsive to allocation changes resulting from supply shocks. Some numerical examples illustrate the sectoral and aggregate consistency of the allocation equilibrium. |
| Keywords: | Multi-sectoral Input-Output Models, Market Economy, Planned Economy |
| JEL: | C63 C67 P2 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:11.02&r=cmp |
| By: | Charles F. Mason (Department of Economics & Finance, University of Wyoming); Andrew J. Plantinga (Department of Agricultural and Resource Economics, Oregon State University) |
| Abstract: | Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important in the use of carbon offsets as part of climate change mitigation. Analyzing optimal contracts for forest carbon sequestration, an important offset category, we conduct a national-scale simulation using results from an econometric model of land-use change. The results indicate that for an increase in forest area of 50 million acres, annual government expenditures with optimal contracts are about $4 billion lower compared than under a uniform subsidy. |
| Keywords: | Carbon Sequestration, Incentive Contracting, Offsets, Additionality |
| JEL: | Q2 D8 L15 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.13&r=cmp |