|
on Computational Economics |
|
Issue of 2017‒04‒23
twenty-one papers chosen by |
| By: | Laura Cristina Lanzarini; Augusto Villa Monte; Aurelio F. Bariviera; Patricia Jimbo Santana |
| Abstract: | One of the key elements in the banking industry rely on the appropriate selection of customers. In order to manage credit risk, banks dedicate special efforts in order to classify customers according to their risk. The usual decision making process consists in gathering personal and financial information about the borrower. Processing this information can be time consuming, and presents some difficulties due to the heterogeneous structure of data. We offer in this paper an alternative method that is able to classify customers' profiles from numerical and nominal attributes. The key feature of our method, called LVQ+PSO, is the finding of a reduced set of classifying rules. This is possible, due to the combination of a competitive neural network with an optimization technique. These rules constitute a predictive model for credit risk approval. The reduced quantity of rules makes this method not only useful for credit officers aiming to make quick decisions about granting a credit, but also could act as borrower's self selection. Our method was applied to an actual database of a credit consumer financial institution in Ecuador. We obtain very satisfactory results. Future research lines are exposed. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1704.04450&r=cmp |
| By: | Faaiqa Hartley; Dirk van Seventer; Emilio Tostão; Channing Arndt |
| Abstract: | Mozambique is one of the most promising African countries for producing biofuels and the national biofuel policy of 2009 identifies measures to incentivize biofuel production. Demand for biofuels in the Southern African Development Community is expected to increase over the next few years as 7 of its 15 member states have implemented or proposed the implementation of blending mandates by 2020. South Africa is one of these countries. Using a dynamic recursive computable general equilibrium (CGE) model, we estimate the impacts of expanding biofuel production in Mozambique under both commercial and smallholder-type farming models, including and excluding bagasse cogeneration. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-177&r=cmp |
| By: | Jason N. Harris; Jason Nassios; James A. Giesecke |
| Abstract: | This working paper describes the process followed to arrive at a suitable specification for the agent- and instrument-specific rate-of-return matrix for the VU-Nat financial computable general equilibrium (FCGE) model of the Australian economy. Several sources were consulted to obtain appropriate rates of return. These sources are documented in detail in this report. |
| Keywords: | Financial CGE model, Rate of return |
| JEL: | C68 G12 G21 G23 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-270&r=cmp |
| By: | John R. Madden |
| Abstract: | Does the presence of a local university affect the economic development of an area within a large city? This paper focuses on the Western region of Melbourne, which accounts for 18 per cent of the city's population of 4.5 million. Only one of Melbourne's seven universities has located campuses in Western Melbourne, a region containing many areas of social disadvantage. The importance of the University to the region's economy in 2013 is analysed with the aid of a 6-region CGE model, four of the regions covering Greater Melbourne. The analysis is undertaken by simulating a counterfactual that there was no university in the region during the period 1992 to 2013. Under the counterfactual, students who in actuality had studied in Western Melbourne in the period are assumed to have either attended a university in another Melbourne region or forgone a university education. The simulation accounted for a relocation of both the University's demand-side impacts (operating expenditures and student living costs) and its supply-side impacts (knowledge effects). A particular feature of the analysis was the estimation of the interregional relocation of local productivity effects flowing in 2013 from returns to the stocks of human capital and research knowledge accumulated over the years from 1992. For the human capital effects this involved, for each Melbourne region, undertaking detailed estimates of changes in annual university completions, annual migration rates, labour force participation rates, interregional commuting and returns to university qualifications. Key assumptions related to the effects of university proximity on tertiary participation and of place of study on regional attachment. For local R&D effects, regional estimates were made of annual R&D expenditure, knowledge decay, returns to R&D expenditure and regional knowledge spillovers. The simulation results suggested that the presence of a university in Western Melbourne had a significant effect on the region's GDP, but due to interregional commuting the local university had a more muted effect on the real consumption of the region's households. |
| Keywords: | Regional development, higher education, spatial distribution of urban economic activity, regional CGE modelling |
| JEL: | D58 I23 I25 O15 O18 R12 R15 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-272&r=cmp |
| By: | Sherman Robinson |
| Abstract: | This paper considers the role of equilibrium concepts in economic simulation models. The paper defines different types of equilibria and describes their importance in simulation models in terms of their power to describe empirically the results of disequilibrium adjustment processes that then need not be explicitly modelled. The paper addresses the issue of the validity of different equilibrium concepts as “descriptive” or “realistic” and considers the “domain of applicability” of different types of equilibria in different economic models. Examples are drawn from various classes of models: CGE (static and dynamic), DSGE, macroeconomic, multi-market, microsimulation, agent-based, and game theoretic. The focus is on constructing "realistic" or "valid" empirical simulation models that rely on economic equilibrium concepts. Equilibrium concepts are very powerful in simplifying the construction of simulation models in that they obviate the need to incorporate disequilibrium adjustment processes in the models. They improve model clarity and simplicity, avoiding the "black box" syndrome common in simulation model. Suggest standards for judging the degree of realism of different economic simulation models, and for approaches to empirical validation. |
| Keywords: | Examples from various country/global CGE models, Impact and scenario analysis, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9546&r=cmp |
| By: | Gabriela Ortiz Valverde; María de la Concepción Latorre Muñoz |
| Abstract: | The Trans-Pacific Partnership (TPP) is an ambitious multilateral agreement. Only a few studies have comprehensively evaluated the effects of TPP in different regions or have compared it with other Free Trade Agreements (TTIP, RCEP) using a CGE methodology. The TPP was signed in October 2015. That is why previous studies were done in a framework of uncertainty about the final outcome of the negotiations. The goal of this paper is to offer an updated analysis based on the TPP that has been signed. We focus in Mexico because it plays an important role to consolidate the bridge, between North American region and the Pacific Alliance. By contrast, previous studies have mainly focused on Asian countries. In addition, given the relative increase of services in the trade, we will pay particular attention to the impact of lowering those specific barriers. We want to analyze the effects of reduction in non-tariffs barriers and evaluate its effects at the microeconomic and macroeconomic level. We use a computable general equilibrium (CGE) model, which incorporates the complex analysis of reductions in NTBs. The estimates from NTBs are taken from the existing estimations of gravity-models, which provide Ad valorem tariff equivalents of the NTBs. We estimate an increase on production and trade flow across sectors, as well as in GDP, welfare and aggregate exports and imports. Because the TPP was signed in October 2015. This could be the right time to put into perspective the results of previous studies with ours. |
| Keywords: | México, General equilibrium modeling, Trade issues |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9385&r=cmp |
| By: | Blanchet, Adrien; Carlier, Guillaume; Nenna, Luca |
| Abstract: | We consider a class of games with continuum of players where equilibria can be obtained by the minimization of a certain functional related to optimal transport as emphasized in [7]. We then use the powerful entropic regularization technique to approximate the problem and solve it numerically in various cases. We also consider the extension to some models with several populations of players. |
| Keywords: | Optimal transport; entropic regularization ; Cournot-Nash equilibria |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31576&r=cmp |
| By: | Gao, Lin |
| Abstract: | This paper explores the evolution of interaction and cooperation supported by individuals’ changing trust and trustworthiness on directed weighted regular ring though agent-based modeling. This agent-based model integrates fragility of trust, interaction decision, strategy decision, payoff matrix decision, interaction density and information diffusion. Marginal rate of exploitation of original payoff matrix and relative exploitation degree between the original and mutated payoff matrices are stressed in trust updating; influence of observing is introduced via imagined strategy; relation is maintained through relation maintenance strength. The impact of degree of embeddedness in social network, mutation probability of payoff matrix, mutated payoff matrix, proportion of high trust agents and probabilities of information diffusion within neighborhood and among non-neighbors on the sum of number of actual interaction and cooperation of all agents are probed on the base of a baseline simulation, respectively. Under the experimental design and parameter values selection in this paper, it is found that basically as degree of embeddedness in social network, proportion of high trust agents and probability of information diffusion in neighbors increase, as mutation probability of payoff matrix, conflict in mutated payoff matrix and probability of information diffusion in non-neighbors decrease, interaction and cooperation perform better. |
| Keywords: | Trust, directed weighted regular ring, agent-based modeling, evolution of cooperation |
| JEL: | B52 C63 D82 D85 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78428&r=cmp |
| By: | Kirmas, Alexander (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | We examine the economic viability of second-life batteries from electric vehicles for load shifting and peak shaving in residential applications. We further investigate the expected impact of a growing number of residential storage systems on the electricity market. For the analysis a simulation model of a private household with integrated PV-storage system is used that is parametrized for an electricity demand of three people and a location in southern Germany. The conditions for which investments in second use batteries are profitable are examined for three scenarios. The central scenario S2 tackles an expected net increase in the electricity price by 4% per year. Upward and downward deviations from this price trajectory are covered by scenarios S1 and S3. For scenario S1, we find that investments in storage systems are profitable for all Li-ion battery costs assumed. In scenario S2, the breakeven battery price is found to be 107 € kWh-1, whereas in scenario S3 with the lowest electricity price growth the battery price has to be equal or lower than 73 € kWh-1 to maintain economic viability. |
| Keywords: | E-vehicle; Residential electricity; Battery storage; Load shifting; Peak shaving |
| JEL: | D12 Q41 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2016_007&r=cmp |
| By: | Peter B. Dixon; Maureen T. Rimmer; Robert G. Waschik |
| Abstract: | USAGE is a dynamic, CGE model of the U.S. economy created at CoPS in collaboration with the U.S. International Trade Commission (USITC). The model has been used by and on behalf of: the USITC; the U.S. Departments of Commerce, Agriculture, Energy, Transportation and Homeland Security; private sector organizations such as the Cato Institute and the Mitre Corporation; and the Canadian Embassy in Washington DC. To keep the model relevant for policy analysis, it must be updated periodically. This paper describes a major update of USAGE undertaken for the USITC. In accordance with the CoPS contract with the USITC, the update task was to: 1. build a NAICS-based database at the 400-industry level for USAGE using the 2007 BEA benchmark input-output tables; 2. update this database to 2014; 3. create a baseline projection starting from the base year of 2014 and proceeding at 5 year intervals to 2024; and 4. conduct an illustrative USAGE policy simulation around the baseline. At the completion of this work in August 2016, the ITC requested a fifth task: 5. update from 2007 to 2015 rather than 2014 and create a baseline from 2015 to 2020. This paper describes how we undertook the five tasks. |
| Keywords: | USAGE CGE model, data updating, baseline forecasting |
| JEL: | C67 C68 C81 C82 D57 D58 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-269&r=cmp |
| By: | Willenbockel, Dirk |
| Abstract: | The present study applies purpose-built dynamic computable general equilibrium models for Ghana and Kenya with a disaggregated country-specific representation of the power sector to simulate the prospective medium-run growth and distributional implications associated with a shift towards a higher share of renewables in the power mix up to 2025. In both countries the share of fossil-fuel-based thermal electricity generation in the power mix will increase sharply over the next decade and beyond according to current national energy sector development plans. The overarching general message suggested by the simulation results presented here is that in both countries it appears feasible to reduce the carbon content of electricity generation significantly without adverse consequences for economic growth and without noteworthy distributional effects. |
| Keywords: | Green growth; Low carbon growth; Sub-Saharan Africa; CGE analysis; computable general equilibrium |
| JEL: | D58 Q42 Q43 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78070&r=cmp |
| By: | Olga Kiuila (University of Warsaw) |
| Abstract: | In the coming decades the energy sector in Poland will undergo a substantial transition towards low carbon usage which will have a preponderant impact on the economy. Several modernization scenarios for energy policy are currently being discussed and not yet concluded. The main objective of the paper is to provide a tool that allow to simulate such scenarios and to show the impact into the whole economy by accounting for complex set of linkages between energy sector and other parts of economy. Those scenarios should assume, in different proportions, increasing use of nuclear energy, renewable sources and natural gas in exchange for reduction of carbon.Energy is a crucial economic input circulating in the economy, widely utilized as production factor and consumed in different forms by households. For this reason, any changes in energy will have a preponderant impact on the entire economy, thus partial equilibrium modeling is not sufficient. Currently there is no appropriate research tool in Poland which could accommodate complex structure of different energy sources and wide linkages of the energy sector to assess economy-wide impacts of the energy policy in longer horizon for Poland. We propose a hybrid general equilibrium modeling that incorporates energy technologies (bottom-up approach) directly into macroeconomic structure (top-down approach).By accounting for wide adjustments in the economy, while controlling for all major constraints - such as energy balance and available capital stock - the model can give a unique and detailed insight into the future shape of energy sector and low carbon economy in Poland.Based on the model outcomes we can state that simulation results can be very much biased even if the model is properly calibrated. We present several issues that should prevent modelers to supply results to policy-makers without careful tests. The immediate source of ?strange? results is wrong model design to study specific topics. The lack of formal tests to validate computable general equilibrium models should not be a pass for unreasonable results. Our study helps to understand the source of selected ?strange? results. |
| Keywords: | computable general equilibrium modeling, dynamics, capital market, energy technologies |
| JEL: | C61 D58 Q43 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:4707151&r=cmp |
| By: | Peter B. Dixon; Maureen T. Rimmer; Robert G. Waschik |
| Abstract: | The U.S. government attempts to stimulate employment, especially in the manufacturing sector, by favoring U.S. contractors for public sector projects (Buy American regulations) and by insisting that these contractors themselves favor domestic suppliers of inputs such as steel (Buy America regulations). We refer to these policies collectively as Buy America(n). Using a detailed computable general equilibrium model, we demonstrate that Buy America(n) policies are counter-productive. The main reason is that they increase costs to the U.S. government. Scrapping these policies would reduce employment in manufacturing but boost employment in the rest of the economy with a net gain of about 306 thousand jobs. Even in the manufacturing sector, there would be many winning industries including those producing machinery and other high-tech products. Employment would increase in 50 out of 51 states and 430 out of 436 congressional districts. |
| Keywords: | Buy America(n), local-content schemes, computable general equilibrium, regional modeling, U S manufacturing |
| JEL: | C68 F13 F16 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-271&r=cmp |
| By: | Martina Sartori; Roberto Roson |
| Abstract: | This paper provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific climate change damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows and households' energy demand. All parameters of the six damage functions are estimated for each of the 140 countries and regions in the GTAP9 dataset. a new set of climate change damage functions has been presented, improving earlier estimates in several ways. First, functions and parameters are provided with a large regional disaggregation (140 countries) and in a format which, by referring to the latest GTAP social accounting matrix, makes them easily employable in many CGE and CGE-based models. Information from new, recently available studies, typically from the non economic literature, has been processed in such a way that parameter values for economic variables, like labor productivity, can be estimated. To illustrate the salient characteristics of our estimates, we approximate the change in real GDP for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, we highlight which factor is the most significant one in each country, and we elaborate on the distributional consequences of climate change. In addition to tourism income, variations in agricultural and labor productivity are also very relevant in many countries. Sea level rise, on the other hand, never appears as the primary factor, because of its limited incidence on total land and the relative small share of land income on GDP. Our findings confirm that the negative effects of climate change will be mainly borne by developing countries, located in tropical regions. |
| Keywords: | Worldwide, Modeling: new developments, Impact and scenario analysis |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9171&r=cmp |
| By: | Gao-Feng Gu; Xiong Xiong; Hai-Chuan Xu; Wei Zhang; Yong-Jie Zhang; Wei Chen; Wei-Xing Zhou |
| Abstract: | We develop an empirical behavioural order-driven (EBOD) model, which consists of an order placement process and an order cancellation process. Price limit rules are introduced in the definition of relative price. The order placement process is determined by several empirical regularities: the long memory in order directions, the long memory in relative prices, the asymmetric distribution of relative prices, and the nonlinear dependence of the average order size and its standard deviation on the relative price. Order cancellation follows a Poisson process with the arrival rate determined from real data and the cancelled order is determined according to the empirical distributions of relative price level and relative position at the same price level. All these ingredients of the model are derived based on the empirical microscopic regularities in the order flows of stocks on the Shenzhen Stock Exchange. The model is able to produce the main stylized facts in real markets. Computational experiments uncover that asymmetric setting of price limits will cause the stock price diverging exponentially when the up price limit is higher than the down price limit and vanishing vice versus. We also find that asymmetric price limits have influences on stylized facts. Our EBOD model provides a suitable computational experiment platform for academics, market participants and policy makers. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1704.04354&r=cmp |
| By: | Klára Major; Drucker, Luca Flóra |
| Abstract: | This paper presents the results of a CGE application that is used to measure and understand how sectoral shocks might influence the Hungarian economy, its economic agents and its different industries. The electricity outages are modelled by the decrease in the supply of energy. A 62 sectoral CGE model has been calibrated for the Hungarian economy. The capital stock of the energy industry is shocked, which has led to a decrease in the supply of energy. It is assumed that energy is a close complement to other goods both in production and consumption. In the base scenario a 2.08% decline in the supply of energy leads to a 0.53% decline in the GDP. Without price rigidities and other frictions, the adjustment is mainly driven by agents who can react at the lowest price. Therefore, this estimation should be considered as a lower bound on the real costs of adjustment. It is also shown that if prices are distorted, the costs of an outage are higher. |
| Keywords: | Hungary, Impact and scenario analysis, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9580&r=cmp |
| By: | Nicola Bianchessi (Johannes Gutenberg University Mainz, University of Brescia); Michael Drexl (Johannes Gutenberg University Mainz, Deggendorf Institute of Technology); Stefan Irnich (Johannes Gutenberg University Mainz) |
| Abstract: | In classical routing problems, each customer is visited exactly once. By contrast, when allowing split deliveries, customers may be served through multiple visits. This potentially results in substantial savings in travel costs. Even if split deliveries are bene?cial to the transport company, several visits may be undesirable on the customer side: at each visit the customer has to interrupt his primary activities and handle the goods receipt. The contribution of the present paper consists in a thorough analysis of the possibilities and limitations of split delivery distribution strategies. To this end, we investigate two different types of measures for limiting customer inconvenience (a maximum number of visits and the temporal synchronization of deliveries) and evaluate the impact of these measures on carrier e?ciency by means of different objective functions (comprising variable routing costs, costs related to route durations, ?xed ?eet costs). We consider the vehicle routing problem with time windows in which split deliveries are allowed (SDVRPTW) and de?ne the corresponding generalization that takes into account customer inconvenience constraints (SDVRPTW-IC). We design an extended branch-and-cut algorithm to solve the SDVRPTW-IC and report on experimental results showing the impact of customer inconvenience constraints. We ?nally draw useful insights for logistics managers on the basis of the experimental analysis carried out. |
| Keywords: | Split delivery vehicle routing problem, Time windows, Synchronization, Maximum number of visits, Branch-and-cut |
| Date: | 2017–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1706&r=cmp |
| By: | Milad Maralani; Milad Maralani; Basil Sharp; Golbon Zakeri |
| Abstract: | In New Zealand approximately 39% of electricity is consumed by large industries. In 2012, The University of Auckland engineering team proposed to develop novel heat exchanger technology to allow electricity demand shaving and load shifting in light metal industries. This technology provides significant cost savings for such companies and preserves generation capacity at peak times for other users. The aim of this study is to represent the impact of adopting this technology in a particular, electricity intensive sector (e.g. steel or light metals manufacturing), on the electricity market and economic system as a whole. New Zealand’s economy is represented as a static CGE model, and the electricity sector is represented by a bottom-up model. An iterative algorithm settles the quantities and price between these two models; the general equilibrium sub-model uses the MCP format, and the electricity sector is based on optimization. Initial results show that a decrease in electricity demand by our targetted sector has an impact on some other sectors of the economy(e.g. manufacturing). Exports increase as a result of lower equilibrium prices for domestic intermediate goods. However, the domestic price of final products increased slightly as a result of more goods being exported. |
| Keywords: | New Zealand, Energy and environmental policy, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9308&r=cmp |
| By: | Michael Benzaquen; Jean-Philippe Bouchaud |
| Abstract: | We suggest that the broad distribution of time scales in financial markets could be a crucial ingredient to reproduce realistic price dynamics in stylised Agent-Based Models. We propose a fractional reaction-diffusion model for the dynamics of liquidity in financial markets, where agents are very heterogeneous in terms of their characteristic frequencies. Several features of our model are amenable to an exact analytical treatment. We find in particular that the impact is a concave function of the transacted volume (aka the "square-root impact law"), as in the normal diffusion limit. However, the impact kernel decays as $t^{-\beta}$ with $\beta=1/2$ in the diffusive case, which is inconsistent with market efficiency. In the sub-diffusive case the decay exponent $\beta$ takes any value in $[0,1/2]$, and can be tuned to match the empirical value $\beta \approx 1/4$. Numerical simulations confirm our theoretical results. Several extensions of the model are suggested. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1704.02638&r=cmp |
| By: | Reyno Seymore; Martin Combrinck |
| Abstract: | The objective of the study is to determine the necessary growth magnitudes in exogenous final demand for the alternative growth industries identified by the Gabonese government, which would directly offset the GDP decline resulting from the decrease in the production of oil. Input-output analysis has been identified as the appropriate methodology, especially due to data restrictions, since it can be used to evaluate the direct and indirect effects on the economy of various simulations. In the process of answering the study objective, a symmetric input-output table is developed which, at the time of writing, did not exist for Gabon. All the alternative growth industries were simulated separately to directly offset the decline in the oil production, and the required growth magnitudes in these industries were calculated. In addition, a fifth scenario identified that an 8.16% increase in the exogenous final demand of all the alternative growth industries, is sufficient to directly offset the effect that the 2.80% decline in production of the “Production of “raw” petrol and natural gas and petroleum services” industry (B03), has on GDP. In addition, the indirect impact on total production will be positive. |
| Keywords: | Gabon, Developing countries, Energy and environmental policy |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9076&r=cmp |
| By: | Elisa Palagi; Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Laboratory of Economics and Management); Jean-Luc Gaffard (Observatoire français des conjonctures économiques) |
| Abstract: | We build an agent-based model populated by households with heterogenous and time-varying financial conditions in order to study how different inequality shocks affect income dynamics and the effects of different types of fiscal policy responses. We show that inequality shocks generate persistent falls in aggregate income by increasing the fraction of credit-constrained households and by lowering aggregate consumption. Furthermore, we experiment with different types of fiscal policies to counter the effects of inequality-generated recessions, namely deficit-spending direct government consumption and redistributive subsidies financed by different types of taxes. We find that subsidies are in general associated with higher fiscal multipliers than direct government expenditure, as they appear to be better suited to sustain consumption of lower income households after the shock. In addition, we show that the effectiveness of redistributive subsidies increases if they are financed by taxing financial incomes or savings. |
| Keywords: | Income inequality; Fiscal multipliers; Redistributive policies; Credit-rationing ; agent-based models |
| JEL: | E63 E21 C63 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/6u2usmuctn9r3rgj50gbomltva&r=cmp |