nep-cmp New Economics Papers
on Computational Economics
Issue of 2014‒12‒13
ten papers chosen by
Stan Miles
Thompson Rivers University

  1. TREMOD: a Microsimulation Model for the Province of Trento (Italy) By Davide Azzolini; Martina Bazzoli; Silvia De Poli; Carlo Fiorio; Samuele Poy
  2. A theory of pruning By Lombardo, Giovanni; Uhlig, Harald
  3. A Microsimulation on Tax Reforms in LAC Countries: A New Approach Based on Full Expenditures By Carla Canelas; François Gardes; Silvia Salazar
  4. Documentation IZAΨMOD v3.0: The IZA Policy Simulation Model By Loeffler, Max; Peichl, Andreas; Pestel, Nico; Siegloch, Sebastian; Sommer, Eric
  5. Numerical General Equilibrium Analysis of China's Impacts from Possible Mega Trade Deals By Chunding Li; Jing Wang; John Whalley
  6. GLOMO - Global Mobility Model: Beschreibung und Ergebnisse By Kühn, André; Novinsky, Patrick; Schade, Wolfgang
  7. Computing tournament solutions using relation algebra and RelView By Rudolf Berghammer; Agnieszka Rusinowska; Harrie De Swart
  8. A withdrawal from the Eurozone: Some Simulation Studies with the NiGEM Model By Suni, Paavo
  9. Integrating Real Sector Growth and Inflation Into An Agent-Based Stock Market Dynamics By Franke, Reiner; Ghonghadze, Jaba
  10. Stabilized Column Generation for the Temporal Knapsack Problem using Dual- Optimal Inequalities By Timo Gschwind; Stefan Irnich

  1. By: Davide Azzolini (FBK-IRVAPP); Martina Bazzoli (FBK-IRVAPP); Silvia De Poli (FBK-IRVAPP); Carlo Fiorio (University of Milano and FBK-IRVAPP); Samuele Poy (FBK-IRVAPP)
    Abstract: This paper presents the main characteristics of TREMOD, a tax-benefit microsimulation model for the Italian province of Trento (Italy). TREMOD is based upon the Italian adaptation of the EUROMOD platform microsimulation model, and its purpose is to inform local tax and welfare policies. TREMOD is a flexible tool that allows simulation of the effects of different types of public policies on a plurality of outcomes such as, for example, individuals' and households' income and well-being. The main strength of TREMOD is the high quality of the data used for its construction. The input database has been obtained by matching survey data (derived from a local representative survey on households' life conditions, Indagine sulle condizioni di vita delle famiglie trentine) with administrative data on individual income tax returns. This aspect is one of the main strengths of TREMOD compared with other experiences in microsimulation modelling. As we show in this paper, the combination of survey and administrative data ensures good precision in the simulations and will allow for the integration of other administrative data sources including pension and labour market records. The first version of TREMOD is a "static" microsimulation model.
    Keywords: Fiscal policy, Microsimulation models, Validation, Administrative data
    JEL: H24 I32 I38
    Date: 2014–11
  2. By: Lombardo, Giovanni; Uhlig, Harald
    Abstract: Often, numerical simulations for dynamic, stochastic models in economics are needed. Higher order methods can be attractive, but bear the danger of generating explosive solutions in originally stationary models. Kim-Kim-Schaumburg-Sims (2008) proposed pruning to deal with this challenge for second order approximations. In this paper, we provide a theory of pruning and formulas for pruning of any order. We relate it to results described by Judd (1998) on perturbing dynamical systems. JEL Classification: C63, C02, C62
    Keywords: numerical economics, numerical simulation, perturbation methods, pruning, Taylor expansion
    Date: 2014–07
  3. By: Carla Canelas (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); François Gardes (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Silvia Salazar (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: In this article, we propose a new method to estimate price effects on micro cross-sectional data using full prices that take into account household domestic production. We use behavioral microsimulations by subpopulations to analyze the redistributive impact of changes on Value Added Tax (VAT) rates in Ecuador and Guatemala. Utility analysis is used to evaluate the consequences on households welfare caused by these tax reforms. The proposed model solves the crucial problem of price data availability in developing countries. The estimates of the full price elasticities highlight the importance of the substitution between time and monetary expenditures within the households domestic production function and show that traditional approaches only tell half of the story. In general, the utility estimates seem to be consistent as they have the expected sign and follow the same pattern of changes in consumption.
    Keywords: Consumer demand; full prices; microsimulation; taxes; time-use; welfare
    Date: 2013–07
  4. By: Loeffler, Max (ZEW Mannheim); Peichl, Andreas (ZEW Mannheim); Pestel, Nico (IZA); Siegloch, Sebastian (University of Mannheim); Sommer, Eric (University of Cologne)
    Abstract: This paper describes IZAΨMOD, the policy microsimulation model of the Institute for the Study of Labor (IZA). The model uses household microdata from the German Socio-Economic Panel Study and firm data from the German linked employer-employee dataset LIAB. IZAΨMOD consists of three components: First, a static module simulates the effects of a tax-benefit reform on the budget of the individual household. This includes taxes on income and consumption, social security contributions, public transfers. Secondly, behavioral labor supply responses are estimated. The third component distinguishes our model from most other microsimulation tools. A demand module takes into account possible restrictions of labor demand and identifies the partial equilibrium of the labor market after the supply reactions.
    Keywords: microsimulation, tax and benefit systems, labor supply, labor demand, Germany
    JEL: D58 H20 J22 J23
    Date: 2014–10
  5. By: Chunding Li; Jing Wang; John Whalley
    Abstract: This paper explores the potential impacts on both China and other major countries of possible mega trade deals. These include the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP), and various blocked deals. We use a numerical 13-country global general equilibrium model with trade costs to investigate both tariff and non-tariff effects, and include inside money to endogenously determine imports on the trade imbalance. Trade costs are calculated using a method based on gravity equations. Simulation results reveal that all FTA participation countries will gain but all FTA non-participation countries will lose. If non-tariff barriers are reduced more, the impacts will be larger. All effects to China on welfare, trade, export and import are positive. Comparatively China-TPP and RCEP will yield the highest welfare outcomes for the US in our model, China-Japan-Korea FTA will generate the second highest welfare outcome, and China-US FTA will generate the third highest welfare outcome. For the US, China-TPP FTA will generate the highest welfare outcome. For the EU, all China involved mega deals have negative impacts except China-US FTA. For Japan, RCEP will generate the highest welfare outcome. For both Korea and India, RCEP will generate the highest welfare outcome.
    JEL: C68 F47 F53
    Date: 2014–08
  6. By: Kühn, André; Novinsky, Patrick; Schade, Wolfgang
    Abstract: The development of both, emerging markets as well as the already establish markets (USA, Japan, Europe), is highly relevant for future success of the export-oriented German automotive industry. This paper describes the so called Global Mobility Model (GLOMO) based on the system dynamics approach, which simulates the future development of car sales by segment and drive technology. The modularized model contains population, income and GDP development in order to describe the framework in the most important markets (USA, Japan, EU, Brazil, Russia, India, China and South Africa). According to the changes in framework conditions within these countries, worldwide car sales will nearly double up to 2030 (120 Mio. cars a year), with the most dynamic development in the Chinese market. The simulation results also show that - depending on the chosen scenario - a 40 %- share of alternative drive technologies within the worldwide car sales in 2030 seems to be possible.
    Date: 2014
  7. By: Rudolf Berghammer (Institut für Informatik - Universitat Kiel); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Harrie De Swart (Department of Philosophy - Erasmus University Rotterdam)
    Abstract: We describe a simple computing technique for the tournament choice problem. It rests upon relational modeling and uses the BDD-based computer system RelView for the evaluation of the relation-algebraic expressions that specify the solutions and for the visualization of the computed results. The Copeland set can immediately be identified using RelView's labeling feature. Relation-algebraic specifications of the Condorcet non-losers, the Schwartz set, the top cycle, the uncovered set, the minimal covering set, the Banks set, and the tournament equilibrium set are delivered. We present an example of a tournament on a small set of alternatives, for which the above choice sets are computed and visualized via RelView. The technique described in this paper is very flexible and especially appropriate for prototyping and experimentation, and as such very instructive for educational purposes. It can easily be applied to other problems of social choice and game theory.
    Keywords: Tournament ; relational algebra ; RelView ; Copeland set ; Condorcet non-losers ; Schwartz set ; top cycle ; uncovered set ; minimal covering set ; Banks set ; tournament equilibrium set
    Date: 2013
  8. By: Suni, Paavo
    Abstract: A withdrawal of a member state from the EMU due to market pressure has been a rather popular topic in the public debate in recent years. However, the effects of a withdrawal  have been analysed quantitatively surprisingly little. Discussions have been concentrated on the crisis countries, but as the Finnish economic difficulties have deepened also on Finland. In the report, the effects of the potential withdrawal of Greece, one of the weakest economies in the EMU, is studied first. In addition we try to sketch the economic effects of a withdrawal  of the relatively more bal- anced Finland. The analysis is made using an international econometric model (NiGEM), where the global economy and the individual economies are described in a rather detailed way based on economic theory and past economic behaviour. Benefits and costs, measured with effects  on the GDP, of a withdrawal  are related in the short and particu- larly in the longer run to the ability of labour markets to achieve sustainable wage agreements and to the ability to keep the financial markets calm.
    Keywords: NiGEM, simulation, EMU, Grexit, Fixit
    JEL: F47
    Date: 2014–11–14
  9. By: Franke, Reiner; Ghonghadze, Jaba
    Abstract: Concentrating on speculative flow rather than stock demand, the paper puts forward a deterministic continuous-time model of the equity market that is compatible with a growing and inflationary economy. Instead of the systematically rising equity price, the central state variable in now Tobin's q, which makes it necessary to consider explicitly the financing of fixed investment in the real sector. Integrating a number of suitable re-specifications and fixing the variables in the real sector, the model succeeds in the re-establishing (almost) the same mathematical structure as the elegant two-dimensional Lux (1995) model, which implicitly was set up in the usual stationary and non-inflationary environment. Thus a speculative dynamics is obtained that can generate persistent oscillations as well as bubble equilibria and a rich sequence of local and global bifurcations. The model is ready to be combined with the growth cycles in a real sector, where the short-term fluctuations of Tobin's q may then also affect aggregate demand.
    Keywords: speculative dynamics,stock price inflation,herding,logit dynamics,bifurcations
    JEL: D21 D84 G12
    Date: 2014
  10. By: Timo Gschwind (Johannes Gutenberg-Universität Mainz, Germany); Stefan Irnich (Johannes Gutenberg-Universität Mainz, Germany)
    Abstract: We present two new methods to stabilize column-generation algorithms for the Temporal Knapsack Problem (TKP). Caprara et al. [Caprara A, Furini F, and Malaguti E (2013) Uncommon Dantzig-Wolfe Reformulation for the Temporal Knapsack Problem. INFORMS J. on Comp. 25(3):560–571] were the first to suggest the use of branch-and-price algorithms for Dantzig-Wolfe reformulations of the TKP. Herein, the respective pricing problems are smaller-sized TKP that can be solved with a general-purpose MIP solver or by dynamic programming. Our stabilization methods are tailored to the TKP as they use (deep) dual-optimal inequalities, that is, inequalities known to be fulfilled by all (at least some) optimal dual solutions to the linear relaxation.
    Keywords: Column generation, dual inequalities, stabilization
    Date: 2014–11–13

This nep-cmp issue is ©2014 by Stan Miles. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.