nep-cmp New Economics Papers
on Computational Economics
Issue of 2015‒02‒22
eleven papers chosen by
Stan Miles
Thompson Rivers University

  1. Migration feedback effects in networks: an agent-based model By Miriam Rehm; Ali Asjad Naqvi
  2. Effect of Oil Sanctions on the Macroeconomic and Household Welfare in Iran: New Evidence from a CGE Model By Mohammad Reza Farzanegan; Mohammad Mohammadikhabbazan; Hossein Sadeghi
  3. Spillover effects of TTIP on BRICS economies : a dynamic GVC-based CGE model By Cai, Songfeng; Zhang, Yaxiong; Meng, Bo
  4. The agent-based solow growth model with endogenous business cycles By Stolzenburg, Ulrich
  5. A Welfare Assessment of Revenue Management Systems By Dupuis, Nicolas; Ivaldi, Marc; Pouyet, Jérôme
  6. Redesigning a three-echelon logistics network over multiple time periods with transportation mode selection and outsourcing opportunities By Cortinhal, M. J.; Lopes, M. J.; Melo, M. T.
  7. Optimal taxation under regional inequality By Zoubek, Malte; Kessing, Sebastian G.; Lipatov, Vilen
  8. How do we keep proper level of content diversity: The influence of the gigantic platform on content diversity By Lee, Changjun; Hwang, Junseok
  9. Layoff Taxes, Unemployment Insurance, and Business Cycle Fluctuations By Steffen Ahrens; Nooshin Nejati; Philipp L. Pfeiffer
  10. Bilateral netting and contagion dynamics in financial networks By Edoardo Gaffeo; Lucio gobbi
  11. Taxes, Natural Resource Endowment, and the Supply of Labor: New Evidence By Razzak, Weshah; Laabas, Belkacem

  1. By: Miriam Rehm (Chamber of Labour, Austria); Ali Asjad Naqvi (Center for Economic Research in Pakistan (CERP))
    Keywords: migration, agent-based modeling, networks
    JEL: C63 F22 J61
    Date: 2013–10
  2. By: Mohammad Reza Farzanegan (University of Marburg); Mohammad Mohammadikhabbazan (Tarbiat Moddaress University); Hossein Sadeghi (Tarbiat Moddaress University)
    Abstract: We examine the macroeconomic and household welfare consequences of oil sanctions in Iran. We use social accounting matrix (SAM) and develop a computable general equilibrium (CGE) model to simulate selected scenarios in which the exportation of oil from Iran to the rest of the world is banned. Our main results show that higher income households are losing more significantly under oil sanctions. Total imports, exports, private consumption, and GDP fall in response to oil sanctions. Interesting is the increase of net indirect taxes at the time of oil revenues fall. Real exchange rate appreciates in the oil sanction crisis. In addition, labor income increases while the capital income falls in response to oil sanctions in Iran. These simulations are in line with reality of the Iranian economy in post-oil sanction period.
    Keywords: oil, sanctions, CGE model, social accounting matrix, Iran
    Date: 2015
  3. By: Cai, Songfeng; Zhang, Yaxiong; Meng, Bo
    Abstract: This paper uses a GVC (Global Value Chain)-based CGE model to assess the impact of TTIP between the U.S. and the EU on their main trading partners who are mainly engaged at the low end in the division system of global value chains, such as BRICS countries. The simulation results indicate that in general the TTIP would positively impact global trade and economies due to the reduction of both tariff and non-tariff barriers. With great increases in the US–EU bilateral trade, significant economic gains for the U.S. and the EU can be expected. For most BRICS countries, the aggregate exports and GDP suffer small negative impacts from the TTIP, except Brazil, but the inter-country trade within BRICS economies increases due to the substitution effect between the US–EU trade and the imports from BRICS countries when the TTIP commences.
    Keywords: Brazil, India, China, Russia, United States, Europe, International trade, Economic conditions, Trade policy, TTIP, BRICS, GVC, NTBs, Spillover
    JEL: C68 D58 F13
    Date: 2015–01–09
  4. By: Stolzenburg, Ulrich
    Abstract: This article describes a simulated monetary macro model with different types of interacting agents. As such, it is assigned to the field of agent-based computational economics (ACE), where agents become virtual objects in a computer simulation. The ACE model core with labor market and goods market interaction between households and firms is adopted from Lengnick (2013), whereas production technology and technological progress of firms are adopted from the neoclassical Solow (1956) model. Nominal interest rates are set in accordance with the Taylor (1993) principle, characterized by strong responses of monetary policy to deviations from inflation target. Although inflation desirably follows lagged output in a pro-cyclical manner, the dynamic system allows for long-run stability of inflation rates. Firms on aggregate level endogenously generate waves of higher and lower investment. A recurrent cyclical movement of aggregate economic activity, in particular demand, employment and inflation, is transmitted from these waves of investment activity. Cyclical patterns of boom and bust emerge with a frequency of approximately seven years just like Juglar-type cycles. Moreover, the model generates a short-run Phillips-curve relationship, long-run neutrality of monetary policy and business cycle patterns similar to the Goodwin (1967) model. Fiscal stabilization policy is shown to dampen macroeconomic fluctuations, thus allowing for a higher level of average employment. Calibration of model parameters is conducted to generate realistic orders of magnitude of important macroeconomic proportions. The newly developed model is a combination of ideas from different economic perspectives and contributes to macroeconomic model-building under the paradigm of agent-based computational economics.
    Keywords: Agent-Based Computational Economics,Demand-Led Economic Growth,Solow-Swan,Monetary Policy,Phillips Curve,Stabilization Policy
    Date: 2015
  5. By: Dupuis, Nicolas; Ivaldi, Marc; Pouyet, Jérôme
    Abstract: We study the welfare impact of revenue management, i.e. intertemporal price discrimination when the product availability is limited both in time and quantity, and consumers' arrival is random. This practice is particularly relevant, and widely spread, in the transport industry, but little is known about its implications on profits and consumer surplus. We develop a theoretical model of revenue management allowing for heterogeneity in product characteristics, capacity constraints, consumer preferences, and probabilities of arrival. We also introduce dynamic competition between revenue managers. We solve this model computationally and recover the optimal pricing strategies. We find that revenue management is welfare enhancing. Revenue managers face two types of constraints: a limited booking period and fixed capacities. Previous sales affect the relative slackness of these two constraints, explaining price variations. Profits increase as the practice offers more leeway to the seller compared to posting a fixed price throughout the booking period. Total consumer surplus also increases for a wide range of specifications, as revenue management raises the number of sales. In the presence of heterogeneous consumers, consumers with low price sensitivity subsidize ones with high price sensitivity when demand is low but both types benefit from the practice when demand is high. This sheds some light on the impact of revenue management on the surplus of business and leisure passengers.
    Keywords: revenue management, transport fares, intertemporal price discrimination, dynamic computational models.
    JEL: C63 R41
    Date: 2015–01–05
  6. By: Cortinhal, M. J.; Lopes, M. J.; Melo, M. T.
    Abstract: We address the problem of designing/redesigning a multi-echelon logistics network over a multi-period planning horizon. Strategic decisions comprise opening new plants and warehouses at candidate sites and selecting their capacities from a set of available discrete sizes. Capacity expansion may occur more than once over the time horizon both at new locations and at existing facilities. Capacity contraction is a viable option as well that involves closing existing plants and/or warehouses. The operation of the network is also subject to logistics decisions involving supplier selection in conjunction with procurement, production, and distribution of multiple products. Distribution channels are to be identified in each time period as well as the modes of transportation for raw materials and end products. Finally, a strategic choice between in-house manufacturing and a mixed approach with product outsourcing is to be taken. We propose a mixed-integer linear programming model and develop several valid inequalities to enhance the original formulation. To gain insight into the complexity of the problem at hand, an extensive computational study is performed with randomly generated instances that are solved with standard mathematical optimization software. Useful managerial insights are derived from varying several parameters and analyzing the impact of different business strategies on various segments of the logistics network.
    Keywords: logistics network design/re-design,multiple periods,transportation mode selection,product outsourcing,mixed-integer linear programming
    Date: 2014
  7. By: Zoubek, Malte; Kessing, Sebastian G.; Lipatov, Vilen
    Abstract: Regional productivity di erences are large and provide scope for productivity-enhancing inter-regional labor mobility. Using an optimal taxation framework that combines an intensive labor supply margin with an extensive, productivity- enhancing migration margin, we explore the implications of regional productivity differences for the design of optimal tax transfer-schemes. Regional inequality poses an additional restriction on the government which can limit optimal redistribution. With intra-regional migration marginal tax rates tend to be reduced and negative tax rates are possible. Our simulations indicate that the additional restriction can be quantitatively important and that negative tax rates can occur for empirically plausible cases.
    JEL: H11 H21 R12
    Date: 2014
  8. By: Lee, Changjun; Hwang, Junseok
    Abstract: This paper aims to study the origin of the role of diversity in the new ICT ecosystem, and show how the gigantic platform influences on the level of diversity of content. Using genetic algorithm, it makes possible to reflect the new ICT ecosystem and experiment how the system is changing content diversity. The novelty of this method is introducing the new measurement of content diversity which is from the genotype diversity in artificial evolution area. The result of the experiments shows that the exposed diversity of content seems to be maintained, but the genuine diversity of content is decreased gradually and disappeared in the end. In addition, the average performance is also decreased in the long run. This clearly shows that decreasing diversity of content is not perceived as much of problem for the present; however, it will generate a big problem if the regulator does nothing to solve this problem. Therefore, this paper insists that diversity, which is reservoir of creativity and the power of sustainable growth in the new ICT ecosystem, must be kept properly and this is the very first step for settling the new standard. This might contribute for policy makers to give them wisdom by which criteria they can look at the reality in this rapidly changed technology and business environment and we hope more empirical studies are coming with it.
    Keywords: content diversity,platform,ICT ecosystem,sustainability
    Date: 2014
  9. By: Steffen Ahrens; Nooshin Nejati; Philipp L. Pfeiffer
    Abstract: This paper studies the role of labor market institutions in business cycle fluctuations. We develop a DSGE model with search and matching frictions and incorporate a US unemployment insurance experience rating system. Layoff taxes based on experience rating finance the cost of unemployment benefits and create considerable employment adjustment costs. Our framework helps realign the search and matching model with the empirical properties of its most salient variables. The model reproduces the negative correlation between vacancies and unemployment, i.e., the Beveridge curve. Simulations show that the model generates more cyclical volatility in its key variable - the ratio of job vacancies to unemployment (labor market tightness). Moreover, layoff taxes reduce the excess sensitivity of job destruction found in Krause and Lubik (2007) and strengthen the negative correlation of job creation and job destruction. Thus, the model matches key labor market data while incorporating an important feature of the US labor market
    Keywords: search and matching, experience rating, unemployment insurance, Beveridge curve
    JEL: E24 J64 J65
    Date: 2015–01
  10. By: Edoardo Gaffeo; Lucio gobbi
    Abstract: he bilateral netting of mutual obligations is an institutional arrange- ment usually employed in payment systems to reduce settlement risks. In this paper we explore its advantages and pitfalls when applied to an inter- bank lending market, in which banks extend credit to ñand borrow from ñother banks to adjust their short-term liquidity needs. By recurring to computer simulations, we show that bilateral netting considerably reduce the potential for default cascades over an interbank network whenever the source of contagion is a negative shock to the assets of a randomly chosen bank. When the shock hits the liability side of the balance sheet ñas a run on deposits ñthe role of a bilateral netting agreement in mitigating the risk of a systemic liquidity crisis depends critically on the topological characteristics of the interbank network, however.
    Keywords: Bilateral netting, financial networks, contagion
    Date: 2015
  11. By: Razzak, Weshah; Laabas, Belkacem
    Abstract: We use the work-leisure choice model to compute equilibrium weekly hours worked for a number of Arab countries, where actual statistics are unavailable. We show that the labor supply curve is elastic in all Arab countries, and provide a new measure of labor productivity. This finding confirms previous research that workers respond to incentives, which has serious implications for tax and social security policies. We also provide some policy simulations pertinent to the effects of taxation on welfare and poverty.
    Keywords: -worked, natural resource endowment, poverty, welfare
    JEL: E01 E62 J22
    Date: 2011–06–19

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