New Economics Papers
on Computational Economics
Issue of 2013‒08‒10
five papers chosen by

  1. GEM-E3 Model Documentation By P. Capros; D. Van Regemorter; L. Paroussos; P. Karkatsoulis; C. Fragkiadakis; S. Tsani; I. Charalampidis; T. Revesz
  2. Efficiency and Equity Aspects of Energy Taxation By Vandyck, Toon
  3. Macroeconomic Modelling of Public Expenditures on Research and Development in Information and Communication Technologies By Wojciech Szewczyk; Anna Sabadash
  4. Baseline results from the EU27 EUROMOD By Jara Tamayo, Holguer Xavier; Sutherland, Holly
  5. Cupid's Invisible Hand: Social Surplus and Identification in Matching Models. By Salanié, Bernard; Galichon, Alfred

  1. By: P. Capros (National Technical University of Athens – ICCS – E3M Lab); D. Van Regemorter (Energy, Transport and Environment Centre for Economic Studies Katholieke Universiteit Leuven); L. Paroussos (National Technical University of Athens – ICCS – E3M Lab); P. Karkatsoulis (National Technical University of Athens – ICCS – E3M Lab); C. Fragkiadakis (National Technical University of Athens – ICCS – E3M Lab); S. Tsani (National Technical University of Athens – ICCS – E3M Lab); I. Charalampidis (National Technical University of Athens – ICCS – E3M Lab); T. Revesz (Corvinus University of Budapest)
    Abstract: The computable general equilibrium model GEM-E3 has been used in a large set of climate policy applications supporting Commission policy proposals during the last decade, as well as in other environmental and economic policy areas. It can be considered a multi-purpose macroeconomic model, designed to estimate the effects of sector-specific policies on the economy as a whole. The main purpose of this publication is to provide extensive documentation of the model's equations and its underlying databases, in order to offer to the broader audience an accurate description of the model characteristics.
    Keywords: Environmental economics, greenhouse gas emissions reduction, green tax reform, energy tax, energy-intensive sectors, competitiveness, multi-sectoral, computable general equilibrium model (CGE), scenario-building techniques, climate change impacts and adaptation assessment
    JEL: C68 Q54 Q43
    Date: 2013–07
  2. By: Vandyck, Toon
    Abstract: We analyse the distributional effects of increased oil excises in Belgium by combining aComputable General Equilibrium (CGE) model with the EUROMOD microsimulation frameworkthat exploits the rich detail of household-level data. The link between the CGE model and themicro level is top-down, feeding changes in commodity prices, factor returns and employment bysector into a non-behavioural microsimulation. The results suggest that policymakers face anequity-efficiency trade-off driven by the choice of revenue recycling options. Distributional effectsof the environmental tax reform appear to depend strongly on changes in factor prices and welfarepayments.
    Date: 2013–07–30
  3. By: Wojciech Szewczyk (European Commission – JRC - IPTS); Anna Sabadash (European Commission – JRC - IPTS)
    Abstract: Since the 1990s, information and communication technology (ICT) has been an essential driver of economic growth. Between 1995 and 2010, the ICT sectors have accounted for over 20% of EU15 growth, even though they only constitute 5% of EU15 GDP. The high growth resulting from the ever-increasing pace of ICT-related innovation requires high levels of R&D to be sustained. Indeed, the European ICT sector accounts for over a quarter of overall business expenditure on R&D, which makes it the largest R&D investing sector. A set of EU policy initiatives emphasise the importance of ICT and the underlying R&D for boosting European performance and competiveness. In order to ensure that public policies create the right conditions for sustaining and increasing the support for R&D, an appropriate measuring framework based on the thorough review of the best available methodologies need to be devised. Such framework will serve as a tool for choosing the investment strategies of public spending that create a favourable climate for an increase of private spendings on ICT R&D, and to turn investments into economic growth and employment through innovation. This report aims to provide an overview of subjects and topics relevant for constructing a coherent framework for macroeconomic analysis of the impact of public spending on ICT R&D, and to set specific modelling requirements for such a framework. The overview is structured to resemble the sequential multistage causal process which links R&D policy intervention with the resulting economy-wide effects, and covers the following issues: relationship between public and private R&D expenditure, innovation and the R&D process, and diffusion and impact of ICT. Further, building on the theory reviewed and empirical evidence presented, the report identifies the general requirements for a modelling framework to be used for ICT R&D analysis. Since there are existing models which can be used as a base framework, the guidelines focus on the specific requirements for the development of an R&D module. This add-in module is called to provide specific initial solutions to account for economics of ICT R&D, and need to be fully integrated with the base CGE model.
    Keywords: ICT, R&D, public and private investment, innovation, CGE
    JEL: O30 C54 C68 E17 E65
    Date: 2013–08
  4. By: Jara Tamayo, Holguer Xavier; Sutherland, Holly
    Abstract: This paper presents baseline results from the latest version of EUROMOD (version F6.36+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD indicators across countries and over time between 2009 and 2012. Finally, we provide estimates of marginal effective tax rates (METR) for all 27 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. Throughout we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work reported in EUROMOD Working Paper EM3/2013.
    Date: 2013–08–01
  5. By: Salanié, Bernard; Galichon, Alfred (Département d'économie)
    Abstract: We investigate a model of one-to-one matching with transferable utility when some of the characteristics of the players are unobservable to the analyst. We allow for a wide class of distributions of unobserved heterogeneity, subject only to a separability assumption that generalizes Choo and Siow (2006). We first show that the stable matching maximizes a social gain function that trades off the average surplus due to the observable characteristics and a generalized entropy term that reflects the impact of matching on unobserved characteristics. We use this result to derive simple closed-form formulæ that identify the joint surplus in every possible match and the equilibrium utilities of all participants, given any known distribution of unobserved heterogeneity. If transfers are observed, then the pre-transfer utilities of both partners are also identified. We also present a very fast algorithm that computes the optimal matching for any specification of the joint surplus. We conclude by discussing some empirical approaches suggested by these results.
    Date: 2013

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