nep-cmp New Economics Papers
on Computational Economics
Issue of 2016‒09‒18
seven papers chosen by
Stan Miles
Thompson Rivers University

  1. SEAL's operating manual: a Spatially-bounded Economic Agent-based Lab By Bernardo Alves Furtado; Isaque Daniel Rocha Eberhardt; Alexandre Messa
  2. Whose Balance Sheet is this? Neural Networks for Banks’ Pattern Recognition By Carlos León; José Fernando Moreno; Jorge Cely
  3. Economic impacts of natural gas flow disruptions between Russia and the EU By Oosterhaven, Jan; Bouwmeester, Maaike
  4. Improving the Validity of Microsimulation Results: Lessons from Slovakia By Zuzana Siebertova; Norbert Svarda; Jana Valachyova
  5. The impact of social transfers on income poverty and material deprivation By Geranda Notten; Anne-Catherine Guio
  6. Endogenous Fluctuations and Social Welfare under Credit Constraints and Heterogeneous Beliefs By Maurizio MOTOLESE; NAKATA Hiroyuki
  7. Règles budgétaires touchant les dépenses consolidées By Bryan Campbell; Michel Magnan; Benoit Perron; Zabiullah Tarshi

  1. By: Bernardo Alves Furtado; Isaque Daniel Rocha Eberhardt; Alexandre Messa
    Abstract: This text reports in detail how SEAL, a modeling framework for the economy based on individual agents and firms, works. Thus, it aims to be an usage manual for those wishing to use SEAL or SEAL's results. As a reference work, theoretical and research studies are only cited. SEAL is thought as a Lab that enables the simulation of the economy with spatially bounded microeconomic-based computational agents. Part of the novelty of SEAL comes from the possibility of simulating the economy in space and the instantiation of different public offices, i.e. government institutions, with embedded markets and actual data. SEAL is designed for Public Policy analysis, specifically those related to Public Finance, Taxes and Real Estate.
    Date: 2016–09
  2. By: Carlos León (Banco de la República de Colombia); José Fernando Moreno (Banco de la República de Colombia); Jorge Cely (Banco de la República de Colombia)
    Abstract: The balance sheet is a snapshot that portraits the financial position of a firm at a specific point of time. Under the reasonable assumption that the financial position of a firm is unique and representative, we use a basic artificial neural network pattern recognition method on Colombian banks’ 2000-2014 monthly 25-account balance sheet data to test whether it is possible to classify them with fair accuracy. Results demonstrate that the chosen method is able to classify out-of-sample banks by learning the main features of their balance sheets, and with great accuracy. Results confirm that balance sheets are unique and representative for each bank, and that an artificial neural network is capable of recognizing a bank by its financial accounts. Further developments fostered by our findings may contribute to enhancing financial authorities’ supervision and oversight duties, especially in designing early-warning systems. Classification JEL: C45, C53, G21, M41
    Keywords: supervised learning, machine learning, artificial neural networks, classification
    Date: 2016–09
  3. By: Oosterhaven, Jan; Bouwmeester, Maaike (Groningen University)
    Abstract: In this paper we use a non-linear programming approach to predict the wider interregional and interindustry impacts of natural gas flow disruptions. In the short run, economic actors attempt to continue their business-as-usual and follow established trade patters as closely as possible. In the model this is modelled by minimizing the information gain between the original pattern of economic transactions and the situation in which natural gas flows are disrupted. We analyze four scenarios that simulate Russian export stops of natural gas by means of a model calibrated on an international input-output table with six sectors and six regions. The simulations show that at the lower levels of aggregation considerable effects are found. At the aggregate level of the whole economy, however, the impacts of the four scenarios are negligible for Europe and only a little less so for Russia itself. Interestingly, the effects on the size of the economy, as measured by its GDP, are predominantly positive for the various European regions, but negative for Russia. The effects on the welfare of the populations involved, however, as measured by the size of domestic final demand, have an opposite sign; with predominantly negligible but negative effects for European regions, and very small positive effects for the Russian population.
    Date: 2016
  4. By: Zuzana Siebertova (Council for Budget Responsibility); Norbert Svarda (Council for Budget Responsibility); Jana Valachyova (Council for Budget Responsibility)
    Abstract: This paper summarizes the lessons learned in the process of building a microsimulation tool tailored to country-specific conditions and involving a maximum degree of user control. The objective to construct a model useful in the process of budgeting and fiscal forecasting has been achieved by paying attention to policy simulation details as well as to the representativeness of the underlying micro-dataset. The validity of simulated results improved significantly after the input database sample has been reweighted in such a way that the new weights replicate, among other factors, the earned income distribution and selected age cohorts directly. Innovative approaches in bringing the model closer to legislation as well as data highlight the benefits of having more user control compared with standardized microsimulation tools.
    Keywords: microsimulation, calibration, EUROMOD, tax and transfer policy, Slovakia
    JEL: C81 C83 C88 I38 H24
    Date: 2016–08
  5. By: Geranda Notten; Anne-Catherine Guio
    Abstract: This paper develops a simulation approach to study the effects of income transfers on material deprivation. The method is applied to pre-recession and post-austerity EU-SILC data for Germany, Greece, Poland and the United Kingdom. The results show that income transfers can not only reduce income poverty but they can also substantially reduce the extent and depth of material deprivation. Changes in social transfers have therefore a two-fold effect on the Europe 2020 poverty reduction target.
    Keywords: economic well-being, poverty, social exclusion, income, material deprivation, social transfers, Europe 2020 strategy, simulation
    JEL: D31 I32 I38
    Date: 2016–09
  6. By: Maurizio MOTOLESE; NAKATA Hiroyuki
    Abstract: This paper examines the relationship between the aggregate output level and social welfare in an overlapping generations (OLG) model of a financial economy with heterogeneous beliefs by focusing on the case of rational beliefs in the sense of Kurz (1994). The aggregate output level is affected by the endogenously determined net supply of the riskless asset, which in turn is affected by the distribution of beliefs; thus, there is a coordination issue. To measure the social welfare, we adopt a measure that is based on the ex post social welfare concept in the sense of Hammond (1981), instead of the standard ex ante criterion to reflect the heterogeneous beliefs. Simulation results indicate that there may be an inverse relationship between the aggregate output and the social welfare. The results suggest that commonly used macroeconomic variables such as gross domestic product (GDP) may not be a very appropriate measure when making policy recommendations.
    Date: 2016–08
  7. By: Bryan Campbell; Michel Magnan; Benoit Perron; Zabiullah Tarshi
    Abstract: In this study we analyze the impact on the government deficit of the adoption of fixed budget rules. The literature in this area is considerable and is surveyed in Part A of the Report. Here we observe that rules fall under two general categories. The first is goal oriented with specific overall objectives for the deficit, as in the zero-deficit rule. A second approach focuses on expenditure limitations or restrictions. In our review of the literature, we also note that those jurisdictions that have imposed the discipline of a budget rule have experienced better results in managing their deficits. We turn our attention in Part B to the construction of a coherent set of budget data over as long a span as possible. The first reality that we faced is that comparable Quebec Public Accounts data extends only to 1998. Since this date, however, there have been two accounting reforms that necessitate considerable adjustments to the data in order to render them compatible. This part of the Report suggests a variety of resolutions and reconstructs the different components of the budget data for each of the resolutions. Based on this data analysis, Part C presents the results of an extensive simulation exercise to illustrate the impact of different budget rules on the evolution of the budget over a mid-term horizon. Ce rapport vise à analyser l’impact potentiel sur le déficit gouvernemental de la mise en œuvre d’une règle budgétaire. Selon les écrits dans le domaine, lesquels sont résumés dans le volet A du rapport, une règle budgétaire peut prendre différentes formes qui peuvent se regrouper en deux catégories, soit les règles spécifiant des cibles de déficit strictes (p. ex., déficit zéro) et les règles détaillées qui portent sur les augmentations (diminutions) de dépenses. Nous recensons un certain nombre de juridictions qui ont appliqué l’une ou l’autre de ces règles. Globalement, les juridictions ayant adopté la discipline d’avoir une règle budgétaire semblent afficher une meilleure performance quant à la gestion de leur déficit.Pour faire suite à cette synthèse des écrits, dans le cadre du volet B, nous dirigeons notre attention sur les comptes publics du gouvernement du Québec. En effet, afin d’éventuellement analyser l’efficacité relative de différentes règles budgétaires, il nous faut tout d’abord pouvoir compter sur des données budgétaires cohérentes sur plusieurs années. Or, à cet égard, nous avons fait face à deux défis de taille. Premièrement, les comptes publics du gouvernement du Québec présentés dans un format comparable ne remontent qu’à 1998. Deuxièmement, depuis 1998, deux réformes comptables majeures ont modifié la teneur des séries temporelles des comptes publics, rendant toute comparaison couvrant différentes réformes comptables hasardeuse. Par conséquent, nous avons dû recourir à des méthodologies d’estimation pour construire des séries temporelles de données budgétaires comparables. Ce travail a impliqué à la fois les chiffres budgétaires ainsi que les comptes publics audités. Dans le cadre du volet B, nous présentons les détails des différentes approches considérées afin d’estimer ces séries temporelles comparables. Le volet C est au cœur du rapport et présente les résultats de simulations de l’application de différentes règles budgétaires.
    Date: 2016–09–08

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