nep-cmp New Economics Papers
on Computational Economics
Issue of 2015‒06‒05
nine papers chosen by
Stan Miles
Thompson Rivers University

  1. Efficiency or Equity? Simulating the Carbon Emission Permits Trading Schemes in China Based on an Inter-Regional CGE Model By Libo Wu; Weiqi Tang
  2. The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis By Osman, Rehab Osman Mohamed
  3. Systemic risk and macro-prudential policies: A credit network-based approach By Catullo, Ermanno; Gallegati, Mauro; Palestrini, Antonio
  4. Deleveraging crises and deep recessions: a behavioural approach By Pascal Seppecher; Isabelle Salle
  5. A Quantitative Framework for Assessing Public Investment in Tourism- An Application to Haiti By Onil Banerjee; Martin Cicowiez
  6. Innovative Development of Medical Organizations in Reforming of the Health Care System By Generalov, A; Yashina, E; Sorokoletov, P
  7. Dynamic Control of Complex Transit Systems By Argote-Cabanero, Juan; Daganzo, Carlos F; Lynn, Jacob W
  8. Collateral damage? Micro-simulation of transaction cost shocks on the value of central bank collateral By Lennkh, Rudolf Alvise; Walch, Florian
  9. Structure of global buyer-supplier networks and its implications for conflict minerals regulations By Takayuki Mizuno; Takaaki Ohnishi; Tsutomu Watanabe

  1. By: Libo Wu (School of Economics, Fudan University); Weiqi Tang (School of Economics, Fudan University)
    Abstract: Energy conservation and greenhouse gas (GHG) abatement have been included in the national development strategy of China. However, the rigidity in command-and-control mechanisms and arbitrariness in assignment of GHG abatement burden across regions have caused unnecessary losses in both economic efficiency and social equity. In this paper, we use an Inter-Regional Dynamic CGE (IRD-CGE) model to simulate economic and welfare impacts of climate policies on national and regional level, including carbon intensity targets, regional emission constraints and cap-and-trade mechanism. Comparison among alternative emission reduction policy mechanisms indicates that emission trading scheme can not only moderate the economic and social welfare losses, but also improve social equity by decoupling the allocation of emission permits from economic optimization of emission reduction scheme. From this perspective, emissions trading bridges the concerns for economic efficiency and social equity, since emission permits could be reallocated as an income transfer so as to promote inter-regional equity, while economic efficiency is maintained. Keywords: greenhouse gas emissions; energy conservation; emission reduction; pollution; cap-and-trade mechanism
    JEL: Q54 Q56
    Date: 2015–05
  2. By: Osman, Rehab Osman Mohamed
    Abstract: This thesis examines the potential impacts of the Economic Partnership Agreements (EPAs) between the EU and the Southern African Development Community (SADC). It provides a quantitative assessment of the prospective implications for welfare, output and trade structures, resource allocation, prices and fiscal revenue. The thesis undertakes country- and sector-specific analyses using the multi-region, multi-sector computable general equilibrium (CGE) GLOBE model. The model is calibrated to the Global Trade Analysis Project (GTAP) Database- version 7 for 2004. Different scenarios are implemented in order to simulate the alternative EU-SADC EPA scenarios in addition to their WTO-compatible alternatives. The thesis aims to contribute novel insights to the ongoing debate on the EU-SADC EPAs. It provides detailed country- and sector-specific impact projections within an internally consistent modelling framework. Furthermore, it contemplates the other WTO-compatible arrangements for SADC-EU trade in the case of not signing final EPAs. The simulation results inform answers for several research questions, as follows. Who gains and who loses from the EU-SADC EPAs? Do the agreements help SADC to effectively integrate into the world economy? What type of structural change might SADC experience under the EU-SADC EPA scenarios? How significant are potential adjustment costs for the SADC members likely to be? Are the WTO-compatible alternatives preferable for SADC members compared to the EU-SADC EPAs scenario? The simulation results suggest that a comprehensive EPA scenario is welfare-improving for many SADC members. The agreements, however, do not serve as a stumbling block towards more integration for SADC members into the world markets. Overall, SADC production structures become more concentrated in export-oriented sectors. These structural changes are accompanied by a high degree of adjustment in factor markets and substantial fiscal losses. A comprehensive EPA scenario is the best option vis-à-vis the WTO-compatible alternatives for SADC non-LDCs, whereas the results for SADC LDCs are mixed.
  3. By: Catullo, Ermanno; Gallegati, Mauro; Palestrini, Antonio
    Abstract: Assessing systemic risk and defining macro-prudential policies aiming at reducing economic system vulnerability have been at the center of the economic debate of the last years. Credit networks play a crucial role in diffusing and amplifying local shocks, following the network-based financial accelerator approach (Delli Gatti et al., 2010; Battiston et al., 2012), we constructed an agent based model reproducing an artificial credit network populated by heterogeneous firms and banks. Calibrating the model on a sample of firms and banks quoted on Japanese stock-exchange mar- kets from 1980 to 2012, we try to define both early warning indicators of crises and policy precautionary measures based on the analysis of the endogenous dynamics of credit network connectivity.
    Date: 2015
  4. By: Pascal Seppecher (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - UNS - Université Nice Sophia Antipolis, CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - Université Sorbonne Paris Cité (USPC) - CNRS); Isabelle Salle (CeNDEF - Center for Nonlinear Dynamics in Economics and Finance - Universiteit van Amsterdam, GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS - Université Montesquieu - Bordeaux 4)
    Abstract: Macroeconomic dynamics are characterized by alternating patterns of periods of relative stability and large swings. Standard micro-founded macro-economic models account for these patterns through exogenous and persistent shocks. In this paper, we develop a fully decentralized and micro-founded macro-economic agent-based model, augmented with an opinion model, which produces endogenous waves of pessimism and optimism that feed back into firms' leverage and households' precautionary saving behaviour. A major emergent property of our model is precisely the complex successions of stable and unstable macro-economic regimes. The model is further able to account for a wide spectrum of macro-and micro empirical regularities. Within this framework, we analyse a series of macro-economic phenomena of key relevance in the current macro-economic debate, especially the occurrence of deleveraging crises and Fisherian debt-deflation recessions. Our analysis suggests that the relative dynamics of prices and wages and the resulting income distribution along a deflation-ary path are critical determinants of the severity of the recession, and the chances of recovery.
    Date: 2014–10–30
  5. By: Onil Banerjee (Infrastructure and Environment Sector - IDB); Martin Cicowiez (CEDLAS-UNLP)
    Abstract: This study develops a linked regional computable general equilibrium and micro-simulation (RCGE-MS) model to assess the regional economy-wide and poverty impacts of a US$36 million investment in tourism in the south of Haiti. The first social accounting matrix for Haiti with a base year of 2012/2013 was constructed to calibrate the model. This research addresses three key gaps identified in the tourism impact assessment literature. First, a destination-specific tourism demand and value chain analysis was used to calibrate the shocks implemented in the model. Second, the RCGE-MS approach moves beyond the representative household configuration to enable more robust analysis of tourism investment impacts on poverty and income inequality. Third, results of this modelling were used to inform a social cost-benefit analysis to provide greater transparency in the evaluation of trade-offs between investment alternatives. Considering the investment and projected tourism demand, results show a positive impact on sectoral activity, especially for the hotel and restaurant sector (182.1% in 2040). The investment leads to a 2.0% increase in Gross Regional Product in 2040 compared with the baseline. The South Department’s exports are 4.7% below baseline in 2040 and imports are 6.1% higher due to the inflow of foreign exchange and the consequent appreciation of the regional real exchange rate, increased demand for most goods and services, and limited regional productive capacity. The rate of unemployment falls, beginning at 26% in 2013 and ending at 23.4% by 2040. The investment helps lift some of the poorest in the Haiti’s South out of poverty, reducing the poverty headcount by 1.6 percentage points. Driving this result is an increase in employment, the average wage and non-labor income. The linked RCGE-MS approach proves to be a powerful tool for assessing how tourism investments affect regional economic activity and revealing the mechanisms through which tourism can contribute to increase employment opportunities and reduce poverty.
    Date: 2015–03
  6. By: Generalov, A (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Yashina, E (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Sorokoletov, P (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The complexity and multivariate analysis problems of financial and economic state medical institutions, forecasting and planning activities aimed at the development of its innovative, require the creation of specialized decision support tools (SPR). The paper studied and parameterization defining financial, economic and regulatory factors in their relationship with key performance indicators work diversified medical institutions at a group of federal agencies as part of the General Medical Department (LGU) Office of the President of the Russian Federation. A mathematical model of financial sustainability of health facilities, adequate conditions of health reform and methods of analysis, forecasting and planning of innovative development of diversified medical institution in the conditions of reforming using the tools of interactive simulation on the principle of "what if". Described created based on the model and software information tool - Decision Support System (DSS). The tool allows the decision maker (LPR) in interactive mode to perform the optimization of financial and operational resources, taking into account all influencing factors, simulate and evaluate the impact of macroeconomic conditions on the financial and economic stability of the institutions to carry out simulation and planning the balance of income and expenditure by type of institution provided medical services.
    Date: 2015–04
  7. By: Argote-Cabanero, Juan; Daganzo, Carlos F; Lynn, Jacob W
    Abstract: This paper proposes a dynamic control method to overcome bunching and improve the regularity of fixed-route transit systems. The method uses a combination of dynamic holding and en-route driver guidance to achieve its objectives. It applies to systems with a mix of headway-based and schedule-based lines but it is evaluated for scheduled systems as this is the more challenging application. Improved schedule adherence is the goal. The method’s calculation complexity per piece of advice does not increase with system size. As a result, the method is scalable and can be used with large multiline systems, no matter how complex. When controled, each vehicle is mostly affected by exogenous disturbances (e.g. traffic) and very little by other vehicles. As a result, disruptions to a vehicle or group of vehicles caused by inattentive drivers or control equipment failures remain confined to the vehicles experiencing the problems. The control method effectively quarantines “diseaseâ€. The method is evaluated analytically and with simulations over a broad range of conditions, including schedules with zero slack. The method was also evaluated by observing the performance of a real world multi-line system that uses inexpensive on-board tablets to apply the control. The evaluation addresses driver compliance and equipment malfunction issues. It is found that the method is resilient and improves reliability considerably even under challenging conditions.
    Keywords: Engineering, transit reliability, real world operation, human factors, bus bunching, adaptive control, dynamic holding, multi-line control, resiliency
    Date: 2015–04–30
  8. By: Lennkh, Rudolf Alvise; Walch, Florian
    Abstract: Transaction cost shocks in financial markets are known to affect asset prices. This paper analyses how changes in transaction costs may affect the value of assets that banks use to collateralise borrowings in monetary policy operations. Based on a simple asset pricing model and employing a dataset of hypothetical Eurosystem collateral positions, we simulate and quantify the resulting change in collateral value pledged by counterparties to the Eurosystem, resulting from a transaction cost shock. A 10 basis point increase in transaction costs entails a direct -0.30% decrease of collateral value and a -0.07% decrease when adjusted for the expected reduction in the number of trades of each asset. We conclude that banks will on average suffer small collateral losses while selected institutions could face a considerably larger collateral decrease. JEL Classification: C15, E59, G12
    Keywords: central bank, collateral, monetary policy, transaction cost
    Date: 2015–05
  9. By: Takayuki Mizuno (National Institute of Informatics, Department of Informatics, SOKENDAI, PRESTO, Japan Science and Technology Agency, The Canon Institute for Global Studies,); Takaaki Ohnishi (Graduate School of Information Science and Technology, University of Tokyo, The Canon Institute for Global Studies,); Tsutomu Watanabe (Graduate School of Economics, University of Tokyo, The Canon Institute for Global Studies)
    Abstract: We investigate the structure of global inter-firm linkages using a dataset that contains information on business partners for about 400,000 firms worldwide, including all the firms listed on the major stock exchanges. Among the firms, we examine three networks, which are based on customer-supplier, licensee-licensor, and strategic alliance relationships. First, we show that these networks all have scale-free topology and that the degree distribution for each follows a power law with an exponent of 1.5. The shortest path length is around six for all three networks. Second, we show through community structure analysis that the firms comprise a community with those firms that belong to the same industry but different home countries, indicating the globalization of firms’ production activities. Finally, we discuss what such production globalization implies for the proliferation of conflict minerals (i.e., minerals extracted from conflict zones and sold to firms in other countries to perpetuate fighting) through global buyer-supplier linkages. We show that a limited number of firms belonging to some specific industries and countries plays an important role in the global proliferation of conflict minerals. Our numerical simulation shows that regulations on the purchases of conflict minerals by those firms would substantially reduce their worldwide use.
    Keywords: Global supply chain, Inter-firm network, Scale-free, Community detection, Conflict minerals
    Date: 2015–03

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