|
on Computational Economics |
|
Issue of 2011‒03‒19
eleven papers chosen by |
| By: | Hideo Hashimoto (Osaka University); Kojun Hamada (Niigata University); Marcela Nobuhiro Hosoe (National Graduate Institute for Policy Studies) |
| Abstract: | This is a study to develop and solve numerical models based on Itoh’s (2003, Ch. 1) “Parts Supply Problems” for better understanding the contract theory. In the first part of this paper, by following Itoh (2003) we investigate 2- and 3-agent type cases; in the succeeding part, by using numerical examples, we examine how likely the simplifying assumptions often used in theoretical analysis are to hold. Finally, we demonstrate that we can extend these basic models to ones with a much larger number of agent types easily by exploiting the merit of our programming-model approach. |
| Keywords: | Principal-agent problem, adverse selection, numerical model, single-crossing property, monotonicity |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:10-34&r=cmp |
| By: | De Fence, Janine; McGregor, P. G. (Peter Gregor); Munday, Max; Swales, J. Kim; Turner, Karen |
| Abstract: | This paper considers the combined use of regional input-output (IO) and computable general equilibrium (CGE) methods to examine regional pollution problems from different consumption and production orientated perspectives. The first stage of the analysis involves using a regional input-output framework and data derived on direct CO2 (as carbon) generation by industry (and in household final consumption) to examine regional accountability for CO2 generation. In doing we consider an accounting method that permits greater accountability of regional private and public (household and government) final consumption as the main driver of regional carbon generation, while retaining focus on the local production, technology and consumption decisions that fall under the jurisdiction of regional policymakers. However, we go on to argue that a potential issue arising from the increasing focus on consumption-based „carbon footprint‟ type measures is that regional CO2 generation embodied in export production is attributed outside of the region, while regional consumers are likely to benefit from such production. We demonstrate our argument by using a regional CGE model to simulate the impacts of an increase in export demand for regional production on key macroeconomic variables, including GDP, employment and household consumption, as well as on different measures of CO2 attributable to regional consumption. In terms of the latter, we demonstrate how CGE model results may be used to create „post-shock‟ IO accounts to permit the calculation of CO2 generation under the various production and consumption accounting principles considered in the first part of the paper. Our empirical analyses focus on the case example of the Welsh regional economy and an anticipated increase in export demand for the output of one of the biggest polluting sectors, Iron and Steel production. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2010-16&r=cmp |
| By: | Berisha-Krasniqi, Valdete; Bouet, Antoine; Estrades, Carmen; Laborde, David |
| Keywords: | CGE Modeling, FTA, trade liberalization, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1060&r=cmp |
| By: | Murat YILDIZOGLU (GREQAM, CNRS, UMR 6579); Marc-Alexandre SENEGAS (GREThA, CNRS, UMR 5113); Isabelle SALLE (GREThA, CNRS, UMR 5113); Martin ZUMPE (GREThA, CNRS, UMR 5113) |
| Abstract: | This article questions the rather pessimistic conclusions of Allen et Carroll (2001) about the ability of consumer to learn the optimal buffer-stock based consumption rule. To this aim, we develop an agent based model where alternative learning schemes can be compared in terms of the consumption behaviour that they yield. We show that neither purely adaptive learning, nor social learning based on imitation can ensure satisfactory consumption behaviours. By contrast, if the agents can form adaptive expectations, based on an evolving individual mental model, their behaviour becomes much more interesting in terms of its regularity, and its ability to improve performance (which is as a clear manifestation of learning). Our results indicate that assumptions on bounded rationality, and on adaptive expectations are perfectly compatible with sound and realistic economic behaviour, which, in some cases, can even converge to the optimal solution. This framework may therefore be used to develop macroeconomic models with adaptive dynamics. |
| Keywords: | Consumption decisions; Learning; Expectations; Adaptive behaviour, Computational economics |
| JEL: | E21 D91 D83 D84 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-11&r=cmp |
| By: | Cai Cai Du; Joan Muysken; Olaf Sleijpen |
| Abstract: | We model a three-pillar pension system and analyse in this context the impact of exogenous shocks on an open economy, using an overlapping generations model where individuals live for two periods. The three-pillar pension system consists of (1) a PAYG pension system, (2) a defined benefit pension fund, and (3) private savings. The economy is exposed to an ageing trend, inflation and a stock market crash. We show that in the three-pillar pension system the impact of these shocks on the economy is mitigated when compared to a two- pillar system, since each shock has a different impact on the three pillars. In order to illustrate the working of the model with respect to the impact of these shocks, both in magnitude and the development over time, we provide simulation results for the Netherlands. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:286&r=cmp |
| By: | Daniel Gordon; Rognvaldur Hannesson |
| Abstract: | In the 1970s, the herring stocks in the Northeast Atlantic were nearly fished to extinction. This collapse is usually attributed to technological advances. We investigate the impact of technological shocks on herring stocks and the sensitivity of catch to stock size and technological shocks. We present evidence that the power block was the principal factor in the demise of the herring stock. Our results also indicate the emergence of a significant stock effect in the 1950s. A simulation model indicates that this could be due to an increasing range of the fishing fleet due to ongoing technological progress. |
| JEL: | C22 C53 Q22 |
| Date: | 2011–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2011-05&r=cmp |
| By: | Vanzetti, David; Setyoko, Nur Rakhman; Ngoc Que, Nguyen; Trewin, Ray |
| Abstract: | Both Indonesia and Vietnam, as members of ASEAN, have negotiated a free trade agreement with China (ACFTA). ASEAN Member States can independently negotiate their tariff reductions. Both countries are generally aware of the opportunities access to the large Chinese market may present, but both are concerned to differing degrees about being flooded with Chinese imports, including agricultural products. As the time for implementation approaches, Indonesia has expressed a desire to renegotiate its tariff reduction schedules to protect sensitive sectors, including agriculture. By contrast, Vietnam, just over the border from China and with a history of informal trade, seems more accepting of the prospects. A global general equilibrium model, GTAP, is used to compare the potential impacts of the ASEAN-China Free Trade Agreement on the Indonesian and Vietnamese agricultural sectors. Tariff line data are aggregated to eight primary and four processed agricultural sectors. This enables the differential impact of separate sensitive sectors for Indonesia and Vietnam to be identified. The simulated results following full implementation indicate both countries would improve their trade and welfare if the agreement is implemented as negotiated and tariff cuts are effective, although the extent of exemptions for sensitive products represent differing degrees of missed opportunities for each country. At the sectoral level, both countries can expect some reductions, compared with the baseline, in output of some agricultural sectors, but generally these changes are relatively small unless significant non-tariff barriers are addressed. From an economic perspective, structural adjustment should not be constrained in such circumstances. |
| Keywords: | International Relations/Trade, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare11:101002&r=cmp |
| By: | Blau, David M. (Ohio State University) |
| Abstract: | Empirical analyses of the effects of public and private pensions on household saving impose strong assumptions in order to obtain a tractable empirical model: fixed retirement and pension claiming ages, no borrowing constraint, little or no uncertainty, and no institutional restrictions on pension claiming. I specify a richer version of the life cycle model that relaxes these assumptions. I calibrate, solve, and simulate the model and use the results to study three issues: (1) How much household wealth is crowded out by pensions? (2) Can linear regression analysis accurately estimate the magnitude of crowdout when the assumptions used in the empirical analysis are invalid? (3) How valuable are pensions to households? Simulation results indicate that private pensions in the US crowd out less than $0.15 of household saving per dollar of pension wealth. Crowdout by Social Security is larger at $0.33, but far smaller than the one-for-one offset predicted by a stylized version of the life cycle model. Regression estimates of crowdout using the simulated data are systematically larger than simulated crowdout, indicating that empirical estimates of crowdout are quite sensitive to the assumptions required in order to use the regression approach. The welfare analysis implies that, conditional on Social Security, DB pensions are worth less than their expected present discounted value to households, while DC pensions are worth more than their dollar value. In the absence of a private pension, Social Security is worth 50% more to households than its expected dollar value. |
| Keywords: | pensions, saving, retirement |
| JEL: | J26 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5554&r=cmp |
| By: | Tindara Addabbo; Anna Maccagnan |
| Abstract: | The aim of this paper is to analyse the effects of the crisis on the Italian labour market. The Italian labour market is characterized by deep gender differences and regional variability. The data show that the crisis lead to an increase in the gap of female employment rates and women?s inactivity rates with respect to Europe. The North of Italy experienced a higher increase in unemployment than the South, where many people withdrew from the labour market because of poor employment prospects. Moreover, in Italy, the increase in unemployment has been mitigated by the increase in the number of workers having access to the wage supplementation fund who are not computed within the unemployed. However, the heterogeneity in the system of unemployment benefits increased inequalities amongst the unemployed. Using a micro simulation techniques, we estimate the effect of the crisis on income distribution and poverty and find that at the national level, the population showed a reduction in equivalised household income by about 1 percent. The limited impact on household?s equivalent income can be connected to the relatively high share of unemployed who are young with relatively low income and sustained by other members of the household |
| Keywords: | labour market, poverty, economic crisis |
| JEL: | I32 J6 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0644&r=cmp |
| By: | Sims, Charles; Aadland, David; Finnoff, David |
| Abstract: | Conventional wisdom appears to implicate climate change as the root cause of the unprecedented mountain pine beetle (MPB) outbreak currently underway in the western United States. While climate change is undoubtedly a factor, historic changes in public forest management have resulted in greater numbers of large-diameter host trees in MPB habitat. We present a model that integrates standard economic and ecological principles in an attempt to clarify the roles of climate change and public forest management in the current MPB outbreak. Using data on timber sales, climate change and MPB populations, model simulations illustrate how an increased emphasis on non-timber ecosystem services induced a regime shift from climate-independent to climate-dependent disturbance processes, amplifying the current MPB outbreak. |
| Keywords: | mountain pine beetle; climate change; forests |
| JEL: | Q23 |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29300&r=cmp |
| By: | Amundsen, Eirik Schrøder (University of Bergen); Bergman, Lars (Stockholm School of Economics,) |
| Abstract: | The purpose of this study is to elucidate under which circumstances, how, and to what extent market power on the TGC market can be used to affect the entire electricity market. There are basically two reasons for being concerned with market power in TGC markets. One is that a small number of companies may have exclusive access to first rate sites for wind power generation. The other is that withdrawal of a small number of TGCs implies a multiple reduction of electricity consumption, with corresponding increases of end user prices. For the purpose of investigating the principles by which market power may be exercised in this setting a simple analytical model is designed and analytical results are derived. To investigate matters further a numerical model, based on the analytical model, is constructed for the Nordic countries. Among the Nordic countries only Sweden has a TGC market but there is a common Nordic electricity market with free trade of electricity. The analysis shows that Swedish companies possessing capacity for green electricity generation, indeed, have the ability to exercise market power on the common Nordic power market by withholding TGCs. However, the analysis reveals that an opening of TGC trade between the the Nordic countries to a large extent achieves the objective of eliminating the use of marketpower that would otherwise be established. Also, this may have a cushioning effect on the volatility of TGC prices. |
| Keywords: | Renewable energy; electricity; green certificates; market power; Nordic power market. |
| JEL: | C70 Q28 Q42 Q48 |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2010_012&r=cmp |