nep-cmp New Economics Papers
on Computational Economics
Issue of 2016‒09‒04
four papers chosen by
Stan Miles
Thompson Rivers University

  1. Impact of Brexit: Firm Exit and Loss of Variety By Nobuhiro Hosoe
  2. The Impact of Macroprudential Housing Finance Tools in Canada: 2005–10 By Jason Allen; Timothy Grieder; Brian Peterson; Tom Roberts
  3. Social security wealth and household asset holdings: new evidence from Belgium. By Mathieu Lefebvre; Sergio Perelman
  4. Integrated maritime bunker management with stochastic fuel prices and new emission regulations By Gu, Yewen; Wallace, Stein W.; Wang, Xin

  1. By: Nobuhiro Hosoe (National Graduate Institute for Policy Studies)
    Abstract: The impact of Brexit is investigated using two computable general equilibrium (CGE) models, featuring conventional constant-returns-to-scale (CRS) technology and increasing-returns-to-scale (IRS) technology with firm heterogeneity, a la Melitz. The imposition of trade barriers would trigger a significant contraction of the bilateral trade between the United Kingdom (UK) and the rest of the European Union (EU). While a CRS CGE model predicts that the trade barriers would benefit or only marginally harm the UK fs welfare, the IRS model predicts a larger loss through firm exit and loss of varieties, comparable to the expected saving of the UK fs contribution to the EU budget. Among the UK industries, the textiles and apparel, steel and metal, and automotive and transportation equipment sectors would suffer most severely from their sharp fall in exports.
    Date: 2016–08
  2. By: Jason Allen; Timothy Grieder; Brian Peterson; Tom Roberts
    Abstract: This paper combines loan-level administrative data with household-level survey data to analyze the impact of recent macroprudential policy changes in Canada using a microsimulation model of mortgage demand of first-time homebuyers. Policies targeting the loan-to-value ratio are found to have a larger impact than policies targeting the debt-service ratio, such as amortization. This is because there are more wealth-constrained borrowers than income-constrained borrowers entering the housing market.
    Keywords: Financial system regulation and policies
    JEL: D14 G28 C63
    Date: 2016
  3. By: Mathieu Lefebvre; Sergio Perelman
    Abstract: It has been long suggested that public pension wealth may crowd out household savings. However, there remains controversy about the extent of this displacement effect. In this paper we use an original microsimulation model based on retrospective survey data collected through the third wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) to estimate the displacement effect of public pension wealth on other wealth in Belgium. Combining this rich dataset with an accurate estimation of the individual pension entitlements allows us to circumvent some of the main measurement errors problems faced by previous studies. We estimate that an extra euro of public pension wealth is associated with about 14-25 cent decline in non-pension wealth.
    Keywords: Social security, saving, microsimulation, crowding-out effect.
    JEL: D91 H55 E21 J14
    Date: 2016
  4. By: Gu, Yewen (Dept. of Business and Management Science, Norwegian School of Economics); Wallace, Stein W. (Dept. of Business and Management Science, Norwegian School of Economics); Wang, Xin (Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology)
    Abstract: Maritime bunker management (MBM) controls the procurement and consumption of the fuels used on board and therefore manages one of the most important cost drivers in the shipping industry. At the operational level, a shipping company needs to manage its fuel consumption by making optimal routing and speed decisions for each voyage. But since fuel prices are highly volatile, a shipping company sometimes also needs to do tactical fuel hedging in the forward market to control risk and cost volatility. From an operations research perspective, it is customary to think of tactical and operational decisions as tightly linked. However, the existing literature on MBM normally focuses on only one of these two levels, rather than taking an integrated point of view. This is in line with how shipping companies operate; tactical and operational bunker management decisions are made in isolation. We develop a stochastic programming model involving both tactical and operational decisions in MBM in order to minimize the total expected fuel costs, controlled for financial risk, within a planning period. This paper points out that after the latest regulation of the Sulphur Emission Control Areas (SECA) came into force in 2015, an integration of the tactical and operational levels in MBM has become important for shipping companies whose business deals with SECA. The results of the computational study shows isolated decision making on either tactical or operational level in MBM will lead to various problem. Nevertheless, the most server consequence occurs when tactical decisions are made in isolation.
    Keywords: Maritime bunker management; SECA; risk management; stochastic programming; fuel hedging; sailing behavior
    JEL: C44 C60
    Date: 2016–08–25

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