nep-cmp New Economics Papers
on Computational Economics
Issue of 2015‒07‒04
four papers chosen by

  1. Can the removal of VAT Exemptions support the Poor? The case of Niger By Luc SAVARD; Dorothée BOCCANFUSO; Celine DE QUATREBARBES
  2. The future of agent-based modelling. By Matteo Richiardi
  3. Itchy Feet vs Cool Heads: Flow of Funds in an Agent-based Financial Market By Jan Palczewsk; Klaus Reiner Schenk-Hoppé; Tongya Wang
  4. The Boulding-Richardson Model Revisited By Beckmann, Klaus; Gattke, Susan; Reimer, Lennart

    Abstract: What is the best pro-poor value-added tax (VAT) design to increase public revenue in developing countries: A perfect uniform tax, a multiple-rate system, or a tighter tax base with a high rate? This debate remains relevant, even though many studies have analyzed the economic impact of VAT reforms. Most of these studies have considered VAT as a consumption tax when analyzing the social impact of VAT reforms. However, if VAT exemptions are implemented or if the tax administration is inefficient in issuing refunds for VAT credits, then VAT increases producer’s tax burden and viewing the VAT only as a consumption tax becomes inaccurate. In order to take into account these complexities we built the first micro-macro computable general equilibrium model of Niger’s economy in order to shed some light on the best pro-poor VAT design. The main result of the model reveals that broadening the tax base while maintaining a high VAT rate will lead to an important increase in poverty. Lowering the rate or maintaining exemptions on agricultural goods have the least impact on poverty. However, the social impact of exemptions depends on the net effect of the additional tax burden supported by producers and the increase in domestic demand.
    Keywords: Computable general equilibrium model, micro-simulation, Value Added Tax, distributional analysis, niger
    JEL: I32 H22 E62 D58
    Date: 2015–05
  2. By: Matteo Richiardi (Institute for New Economic Thinking and Nuffield College, Oxford, UK; Collegio Carlo Alberto, Moncalieri, Italy Mathematical Institute, University of Oxford)
    Abstract: In this paper, I elaborate on the role of agent-based (AB) modelling for macroeconomic research. My main tenet is that the full potential of the AB approach has not been realised yet. This potential lies in the modular nature of the models, which is bought by abandoning the straitjacket of rational expectations and embracing an evolutionary perspective. I envisage the foundation of a Modular Macroeconomic Science, where new models with heterogeneous interacting agents, endowed with partial information and limited computational ability, can be created by recombining and extending existing models in a unified computational framework. This crucially requires the development of appropriate application programming interfaces (APIs), a set of routines, protocols, and tools which define functionalities internally used by the simulated agents (e.g. learning algorithms) or used by the agents to interact with other agents (exchange of information, goods and services) that are independent of their respective implementations. Acknowledgements.
    Date: 2015–06–30
  3. By: Jan Palczewsk; Klaus Reiner Schenk-Hoppé; Tongya Wang
    Date: 2015
  4. By: Beckmann, Klaus (Helmut Schmidt University, Hamburg); Gattke, Susan (Helmut Schmidt University, Hamburg); Reimer, Lennart (Helmut Schmidt University, Hamburg)
    Abstract: We review, and extend, one of the classic dynamic models of conflict in economics by Richardson (1919) and Boulding (1962). It turns out that the stability properties of the model change if one takes a more realistic “incrementalist” view, and that chance / friction can easily be incorporated into the standard model by defining a probability of (de-)escalation. This analysis is not just a study in the history of economic thought, but also relevant for the development of simulation models for the analysis of conflict dynamics.
    Keywords: conflict dynamics; psychology of aggression; escalation; stability; patterns of conflict
    JEL: B25 D74
    Date: 2015–06–29

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