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on Computational Economics |
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Issue of 2015‒10‒04
ten papers chosen by |
| By: | Luc Savard; Luca Tiberti |
| Abstract: | Since the late seventies, researchers and policy makers have sought to analyse and simulate the impacts of macro policy reforms on income distribution. Concerns such as the social implications of structural adjustment policies, poverty/inequality effects of trade liberalization, pro-poor or inclusive growth or the poverty impacts of the global food and, subsequently, financial and economic crisis have driven this research agenda. This type of analysis requires tools that combine both macro and micro frameworks. The integration of microsimulation techniques within a computable general equilibrium (CGE) model constitutes such a tool. While CGE models focus on the sectoral, macro and price effects of major policy reforms, they generally fail to adequately capture distributive impacts. On the other hand, microsimulation techniques focus on the household- and individual-specific distributive effects, but are generally confined to micro reforms as they are unable to model general equilibrium effects – notably on the prices of factors and products, as well as other macro variables – of macro reforms. Combining these tools allows the analyst to track the impact of a major policy change or external shock on macroeconomic or sectoral variables down to the change in income or welfare at the household level. The flexibility of both tools has allowed inter alia for distributional impact analysis of various policies and programs in the context of the Millennium Development Goals and the Monterrey Consensus. In this paper we discussed the different approaches of macro-micro models proposed in the literature and identified some possible directions for future research. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2015-12&r=all |
| By: | Péter Járosi (Regional Research Institute, West Virginia University); Randall W. Jackson (Regional Research Institute, West Virginia University) |
| Abstract: | This document provides a proof-of-concept demonstration of an object-oriented approach to modeling an inter-industry system. The example framework uses a small CGE model based on a three-sector social accounting matrix (SAM). The economy is shocked by changing total factor of productivity in the production function, the new equilibrium is determined in classical CGE fashion, and the original SAM is updated to conform to the new equilibrium solution. In this way,the efficiency of the Object-oriented modeling (OOM) approach can be emphasized in the context of the computational simulations of inter-industry systems by a simplified CGE example written in Python. Since this example implemented as only a possible application of the OOM, the proof of the concept should be interpreted as a particular but among the most difficult economic modeling cases. |
| Keywords: | Object oriented modeling, interindustry |
| JEL: | C67 C68 C63 R15 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2015td03&r=all |
| By: | Andrew Mold; Rodgers Mukwaya |
| Abstract: | This study evaluates the economic impact of the proposed COMESA-SADC-EAC Tripartite Free Trade Area (TFTA) on 26 African countries. It uses the global trade analysis project (GTAP) computable general equilibrium (CGE) model and database to measure the static effects of the establishment of the TFTA on industrial production, trade flows and consumption in the tripartite region. The results indicate a significant increase in intra-regional exports as a result of tariff elimination, boosting intra-regional trade by 29 percent. Particularly encouraging is the fact that the sectors benefiting most are manufacturing ones, such as light and heavy manufacturing, and processed food. Concerns have been raised that industrial production in the TFTA would concentrate in the countries with highest productivity levels - namely, Egypt and South Africa. Simulation results suggest that these fears are exaggerated, with little evidence of concentration of industries in the larger countries. |
| Keywords: | Tripartite free trade area, EAC, COMESA, SADC |
| URL: | http://d.repec.org/n?u=RePEc:not:notcre:15/04&r=all |
| By: | Christian Tilk (Johannes Gutenberg University Mainz); Nicola Bianchessi (Johannes Gutenberg University Mainz, University of Brescia); Michael Drexl (Johannes Gutenberg University Mainz, Fraunhofer Centre for Applied Research on Supply Chain Services SCS Nuremberg); Stefan Irnich (Johannes Gutenberg University Mainz); Frank Meisel (University Kiel) |
| Abstract: | This paper presents a branch-and-price algorithm for the exact solution of the active-passive vehicle-routing problem (APVRP). The APVRP covers a range of logistics applications where pickup-and-delivery requests necessitate a joint operation of active vehicles (e.g., trucks) and passive vehicles (e.g., loading devices such as containers or swap bodies). The problem supports a ?exible coupling and decoupling of active and passive vehicles at customer locations in order to achieve a high utilization of both resources. Accordingly, the operations of the vehicles have to be synchronized carefully in the planning. The contribution of the paper is twofold: Firstly, we present an exact branch-and-price algorithm for this class of routing problems with synchronization constraints. To our knowledge, this algorithm is the ?rst such approach that considers explicitly the temporal interdependencies between active and passive vehicles. The algorithm is based on a non-trivial network representation that models the logical relationships between the di?erent transport tasks necessary to ful?ll a request as well as the synchronization of the movements of active and passive vehicles. Secondly, we contribute to the development of branch-and-price methods in general, in that we solve, for the ?rst time, an ng-path relaxation of a pricing problem with linear vertex costs by means of a bidirectional labeling algorithm. Computational experiments show that the proposed algorithm delivers improved bounds and solutions for a number of APVRP benchmark instances. It is able to solve instances with up to 76 tasks, 4 active, and 8 passive vehicles to optimality within two hours of CPU time. |
| Keywords: | Vehicle-routing, Synchronization, Branch-and-price, Linear vertex costs |
| Date: | 2015–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1513&r=all |
| By: | Okan Eren; Serife Genc Ileri |
| Abstract: | A new private pension scheme where the government makes direct contributions to the retirement accounts has been effective in Turkey since 2013. In this paper we examine the quantitative impacts of this new individual retirement system on the saving rate, capital stock and the long-run welfare of the individuals. We build a multi-period OLG model and simulate an economy with a pension scheme similar to the one in Turkey. Our simulation results reveal that the introduction of this private pension scheme increases the net saving rate by 0.27 percentage points. 23.9 percent of the increase in individual retirement assets constitutes incremental saving. The impact of the new system on physical capital stock is a 15.6 percent rise. According to our long-run welfare analysis, an unborn individual prefers to be born into the economy with individual retirement accounts (IRAs). Our results also suggest that cutting down the fees charged on individual retirement accounts generates a considerable improvement in net saving rate and the stock of physical capital. |
| Keywords: | Household Saving, Fiscal Policy, Private Pension Accounts |
| JEL: | D14 D91 E21 E62 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1520&r=all |
| By: | Buhara Aslan; Merve Mavus Kutuk; Arif Oduncu |
| Abstract: | As a result of deadlocked multilateral trade negotiations, many countries have commenced to establish bilateral and regional trade agreements. Among those agreements the Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) are agreements with members from across the Atlantic and the Pacific respectively. This study focuses on the impacts of these agreements on Chinese economy under three scenarios by using the Global Trade Analysis Project database and a computable general equilibrium model. The results suggest that when only the TTIP is realized, Chinese economic variables are negatively affected. When both the TTIP and TPP are realized and China is excluded, the combined damage in Chinese economy is higher than the damage of the TTIP alone. On the other hand, inclusion of China in the TPP results in positively affected economic variables. In other words, positive impacts of participation of China in the TPP compensate for the negative impacts of the TTIP. |
| Keywords: | Free trade agreements, Transatlantic Trade and Investment Partnership, Trans-Pacific Partnership, China |
| JEL: | F13 F14 F15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1523&r=all |
| By: | Garth Heutel; Juan Moreno Cruz; Soheil Shayegh |
| Abstract: | We study optimal climate policy when climate tipping points and solar geoengineering are present. Solar geoengineering reduces temperatures without reducing greenhouse gas emissions. Climate tipping points are irreversible and uncertain events that cause large damages. We analyze three different rules related to the availability of solar geoengineering: a ban, using solar geoengineering as insurance against the risk of tipping points, or using solar geoengineering only as remediation in the aftermath of a tipping point. We model three distinct types of tipping points: two that alter the climate system and one that yields a direct economic cost. Using an analytic model, we find that an optimal policy, which minimizes expected losses from the tipping point, includes both emissions reductions and solar geoengineering from the onset. Using a numerical simulation model, we quantify optimal policy and various outcomes under the alternative scenarios. The presence of tipping points leads to more mitigation and more solar geoengineering use and lower temperatures. |
| JEL: | C61 H23 Q54 Q58 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21589&r=all |
| By: | Michael McAleer (National Tsing Hua University, Hsinchu, Taiwan, Erasmus University Rotterdam, the Netherlands, and Complutense University of Madrid, Spain) |
| Abstract: | The purpose of this paper is to discuss some ideas that might encourage research in Informatics and Data Mining, which includes “Big Data”. This area includes alternative methods, techniques and algorithms for complex and large data sets in computer science, data measurement, acquisition, capturing, processing, sharing, monitoring, storage, transferring, and retrieval, data analysis, and data mining. Suggestions include the analysis of citations databases, PI-BETA (Papers Ignored – By Even The Authors), model specification and testing, pre-test bias and data mining, international rankings of academic journals based on citations, international rankings of academic institutions based on citations and other factors, and case studies in a number of disciplines in the sciences and social sciences. |
| Keywords: | Computer science; Citations databases; Big data; Model specification and testing; Pre-test bias; International rankings of journals and institutions; Case studies |
| JEL: | B23 C81 C82 C87 C88 |
| Date: | 2015–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150115&r=all |
| By: | Yongyang Cai; Kenneth Judd; Jevgenijs Steinbuks |
| Abstract: | This paper introduces a nonlinear certainty equivalent approximation method for dynamic stochastic problems. We first use a novel, stable and efficient method for computing the optimal policy functions for deterministic dynamic optimization problems, and then use them as certainty-equivalent approximations for the stochastic versions. Our examples demonstrate that it can be applied to solve high-dimensional problems with up to four hundred state variables with an acceptable accuracy. This method can also be applied to solve problems with inequality constraints that occasionally bind. These features make the nonlinear certainty equivalent approximation method suitable for solving complex economic problems, where other algorithms, such as log-linearization, fail or are far less tractable. |
| JEL: | C61 C63 C68 E31 E52 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21590&r=all |
| By: | Dirk Bergemann (Cowles Foundation, Yale University); Benjamin Brooks (Dept. of Economics, University of Chicago); Stephen Morris (Dept. of Economics, Princeton University) |
| Abstract: | This paper explores the consequences of information in sealed bid first price auctions. For a given symmetric and arbitrarily correlated prior distribution over valuations, we characterize the set of possible outcomes that can arise in a Bayesian equilibrium for some information structure. In particular, we characterize maximum and minimum revenue across all information structures when bidders may not know their own values, and maximum revenue when they do know their values. Revenue is maximized when buyers know who has the highest valuation, but the highest valuation buyer has partial information about others' values. Revenue is minimized when buyers are uncertain about whether they will win or lose and incentive constraints are binding for all upward bid deviations. We provide further analytic results on possible welfare outcomes and report computational methods which work when we do not have analytic solutions. Many of our results generalize to asymmetric value distributions. We apply these results to study how entry fees and reserve prices impact the welfare bounds. |
| Keywords: | First price auction, Information structure, Bayes correlated equilibrium, Private values, Interdependent values, Common values, Revenue, surplus, Welfare bounds, Reserve price, Entry fee |
| JEL: | C72 D44 D82 D83 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2018&r=all |