|
on Computational Economics |
|
Issue of 2015‒06‒27
seven papers chosen by |
| By: | Alexandru Monahov (University of Nice Sophia Antipolis, France; GREDEG CNRS) |
| Abstract: | This article studies the effects of prudential supervision on bank resiliency and profitability within an agent-based framework that allows us to simulate persistent crisis conditions. It focuses on the stabilizing effect of prudential supervision introduced alongside three "traditional" regulatory instruments: a norm, a market-based CDS insurance mechanism and a tax in the form of a bail-in instrument. The results show that: (i) supervision enhances the regulatory instruments’ efficiency, (ii) the regulatory norm can postpone the bank’s default, but not avoid it, (iii) the CDS mechanism only produces positive results on resiliency and profitability if the regulator supervises, and (iv) the tax bail-in instrument is the most powerful tool in the regulator’s arsenal as it potentiates profitable bank operation under long-lasting crisis conditions. |
| Keywords: | Prudential supervision, Banking system supervision, Financial institution regulation, Agent Based Modeling, Multi-Agent Simulation |
| JEL: | C63 E65 G28 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2015-24&r=cmp |
| By: | Vermeulen, Ben; Pyka, Andreas |
| Abstract: | Ever since the emergence of economics as a distinct scientific discipline, policy makers have turned to economic models to guide policy interventions. If policy makers seek to enhance growth of an open capitalist economy, they have to take into account, firstly, the uncertainties, inefficiencies, and market failures faced by the agents in the economy, and, secondly, the activities, network structure, and interactions in the innovation & production system. The authors discuss ins-and-outs of developing and using (encompassing and empirically calibrated) agent-based models for (i) abductive theorizing about causes for empirical realities, and (ii) evaluating effects of policy interventions. To ensure that derived policies are suitable to intervene in the real world and not just the stylization of it, they discuss validity and operationalization of agent-based models as well as interpretation of simulation results. |
| Keywords: | decision making,uncertainty,rationality,agent-based model,policy instrument,innovation economics,Schumpeter |
| JEL: | B52 C63 D81 O32 P10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201545&r=cmp |
| By: | J. A.Bohlmann., H. R. Bohlmann, and R. Inglesi-Lotz |
| Abstract: | The South African economy has suffered over the past decade due to a lack of adequate electricity supply. With two new coal-fired power stations, Kusile and Medupi, scheduled to come online over a six year period (2014-2019), their additional generation capacity is expected to restore electricity reserve margins and facilitate increased growth and investment in the local economy. In this paper, we use a dynamic CGE model for South Africa to evaluate the economy-wide impact that the additional power generation from these two stations will have across a broad range of macroeconomic and industry variables.In terms of the new power generation capacity, our findings suggest that the macroeconomic impact of Kusile and Medupi will be a definite positive. Results show that, in the medium term, investment expenditure is particularly sensitive to the building of these new power plants. Additional costly blackouts are also likely to be avoided, further promoting economic growth and investment. Once Kusile and Medupi are fully operational and able to provide its projected 9600MW of base load electricity supply, old coal-fired power plants may be decommissioned and replaced by cleaner and more efficient generation sources as outlined in the Department of Energy’s Integrated Resource Plan. Our analysis also suggests that this outcome provides a good balance between utilising modern clean coal technologies that are cost-effective while laying the foundation to improving our generation-mix and carbon emissions profile. |
| Keywords: | computable general equilibrium, UPGEM, electricity supply, Kusile, Medupi |
| JEL: | C68 Q41 Q43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:524&r=cmp |
| By: | Anna Klabunde (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | This report contains the model description for a prototype model of migration decision making which is based on the theory of planned behavior. It makes use of empirically estimated demographic transition rates and is thus, to our knowledge, the first decision model of migration which is embedded in the life course. Moreover, it is, other than most agent-based models, a continous time model which makes heavy use of survival theory and competing risks. The model description follows the ODD+D (``Overview, Design Concepts, Details + Decisions'') protocol as suggested in Müller et al. (2013). |
| Keywords: | Senegal, migration |
| JEL: | J1 Z0 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2015-002&r=cmp |
| By: | Shiro Takeda (Kyoto Sangyo University); Toshi H. Arimura (Waseda University); Makoto Sugino (Yamagata University) |
| Abstract: | International emissions trading (IET) has been widely recognized as a preferred approach for tackling the climate change because it would equalize total abatement costs and generates gains for all participants. However, this argument is heavily premised on the notion of partial equilibrium and ignores general equilibrium effects of IET. Using a multi-region, multi-sector CGE model, this paper analyzes effects of IET with focus on labor market distortions. We construct four separate models with several different labor market specifications: i) a model without labor market distortions (i.e. where the labor supply is determined exogenously and wages are flexible); ii) a model with tax-interaction effects in the labor market (i.e. where the labor supply is endogenously determined and a labor tax exists); iii) a model with a minimum wage; and iv) the final model is one in which a wage curve determines wages. We use these models to analyze how the effects of IET change according to model specification. The main results from the analysis are as follows. First, we found that IET generates gains for all participants in the model without labor market distortions. Second, even in the models with labor market distortions, importers of emissions permits are highly likely to benefit. Conversely, we show that the possibility of a welfare loss from IET is not as small for exporters of permits. In particular, in the minimum wage and wage curve models, we found that the exporters of emissions permits are likely to be disadvantaged. However, this also depends on the region in question. For example, China is likely to suffer under IET, whereas Russia, also an exporter, is likely to benefit. We also make clear that if policies are employed to correct (i.e. reduce) labor market distortions when emissions regulation is introduced, all participants will benefit from IET in almost all cases. It is generally recognized that IET is a desirable policy that benefits all participating regions. However, we show that an analysis that does not take account of such labor market distortions will likely overestimate the benefits of IET for permit exporters. |
| Keywords: | international emissions trading, labor market, computable general equilibrium analysis, tax-interaction effect, minimum wage, wage curve |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:1422&r=cmp |
| By: | Cuesta Leiva,Jose Antonio; El Lahga,Abdelrahmen; Lara Ibarra,Gabriel |
| Abstract: | Tunisian social development policy making has always counted on energy subsidies to play a pivotal role. Due to the increasingly unsustainable budget implications, a new strategy has begun to reform the subsidy system in the energy sector while striking a balance between improving fiscal and equity considerations without increasing social tensions. This paper presents an analysis of the fiscal and distributive consequences of the changes to the subsidy setup announced by the government at the end of 2014. The results show that raising electricity prices for consumers and removing subsidies for other energy sources would lead to a short-term increase in the poverty rate of 2.5 percentage points. In addition, compensation mechanisms that could be readily implemented (such as universal coverage or building on the existing health cards system) will not bring substantive counterweight to the increased poverty, even if all savings of reforms could be perfectly channeled as cash transfers. The analysis suggests that bold reforms of energy subsidies need to be accompanied by equally bold improvements to the targeting schemes of public spending if poverty and disparities are to be substantively reduced. |
| Keywords: | Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Emerging Markets,Taxation&Subsidies |
| Date: | 2015–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7312&r=cmp |
| By: | Boll, Christina; Hüning, Hendrik; Leppin, Julian; Puckelwald, Johannes |
| Abstract: | In a simulation-based study with data from the German Socio-Economic Panel Study (SOEP), we analyze the effects of the newly introduced statutory minimum wage of 8.50 Euro per working hour in Germany on the gender wage gap. In our first scenario where we abstain from employment effects, the pay differential is reduced by 2.5 percentage points from 19.6 % to 17.1 %, due to a reduction of the sticky-floor effect at the bottom of the wage distribution. In more realistic scenarios where we incorporate minimum wage effects on labor demand, a further reduction of the pay gap by 0.2 pp (1.2 pp) in case of a monopsonistic (neoclassical) labor market is achieved. However, this comes at the cost of job losses by which women are more strongly affected than men. The magnitude of job losses ranges between 0.2 % and 3.0 % of all employees. It is higher in a neoclassical market setting and positively related to the assumed wage elasticity. |
| Keywords: | minimum wage,labor demand,wage elasticity,gender pay gap,monopsony |
| JEL: | J31 J23 J16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:163&r=cmp |