Regional responses to macroeconomic and regional policy in Poland

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ageliki Anagnostou ◽  
Vyron Bourelias ◽  
Paweł Gajewski
Keyword(s):  
Computable General Equilibrium ◽  
Regional Differences ◽  
Regional Policy ◽  
Comprehensive Evaluation ◽  
Output Growth ◽  
Small Scale ◽  
Cge Model ◽  
Content Type ◽  
Cge Models ◽  
Country Level

PurposeThe purpose of this paper is to investigate regional impact of macroeconomic and regional policy impulses, using our newly developed multi-regional computable general equilibrium (CGE) model for three, structurally distinctive Polish macro-regions.Design/methodology/approachIn this study, we build an interregional social accounting matrix for Poland and use it to develop a small scale, three-region CGE model, reflecting the size of regional economies and cross-regional differences in industrial structures, while also explicitly accounting for the dynamics of main economic relationships across regions, such as interregional flows in commodities, labor and capital. The model is subsequently use to simulate regional effects of various policy impulses.FindingsWe demonstrate important cross-regional differences in the transmission mechanism of macro-level policies, which either affect regional output and its individual components (as in the case of imposing shocks to VAT or PIT rates) or are limited to the components, while preserving a rather uniform impact on output (as in the case of imposing shocks to wages). Furthermore, we contribute to the regional policy equity-efficiency trade-off debate, by illustrating quantitatively how, due to structural differences, spatially targeted expenditure measures might promote either regional convergence or aggregate output growth at the country-level.Originality/valuePrior to our study, regional CGE models have not been used to simulate spatial distribution of aggregate shocks in Poland or in any other CEE country. Another originality of our study lies in comprehensive evaluation of various policy impulses, from the perspective of their impact on the respective region, spillovers to the other regions and its overall, country-level effect.

scholarly journals The Issue of Macroeconomic Closure Revisited and Extended

2016 ◽  
Vol 66 (1) ◽  
pp. 1-31
Author(s):  
Ernő Zalai ◽  
Tamás Révész
Keyword(s):  
General Equilibrium ◽  
Open Economy ◽  
Computable General Equilibrium ◽  
Statistical Data ◽  
Competitive Equilibrium ◽  
Numerical Models ◽  
Cge Model ◽  
Sector Model ◽  
Cge Models ◽  
Policy Simulations

Léon Walras (1874) had already realised that his neo-classical general equilibrium model could not accommodate autonomous investments. In the early 1960s, Amartya Sen analysed the same issue in a simple, one-sector macroeconomic model of a closed economy. He showed that fixing investment in the model, built strictly on neo-classical assumptions, would make the system overdetermined, and thus one should loosen some neo-classical conditions of competitive equilibrium. He analysed three not neo-classical “closure options”, which could make the model well-determined in the case of fixed investment. His list was later extended by others and it was shown that the closure dilemma arises in the more complex computable general equilibrium (CGE) models as well, as does the choice of adjustment mechanism assumed to bring about equilibrium at the macro level. It was also illustrated through several numerical models that the adopted closure rule can significantly affect the results of policy simulations based on a CGE model. Despite these warnings, the issue of macro closure is often neglected in policy simulations. It is, therefore, worth revisiting the issue and demonstrating by further examples its importance, as well as pointing out that the closure problem in the CGE models extends well beyond the problem of how to incorporate autonomous investments into a CGE model. Several closure rules are discussed in this paper and their diverse outcomes are illustrated by numerical models calibrated on statistical data. First, the analyses are done in a one-sector model, similar to Sen’s, but extended into a model of an open economy. Next, the same analyses are repeated using a fully-fledged multi-sectoral CGE model, calibrated on the same statistical data. Comparing the results obtained by the two models it is shown that although they generate quite similar results in terms of the direction and — to a somewhat lesser extent — of the magnitude of change in the main macro variables using the same closure option, the predictions of the multi-sectoral CGE model are clearly more realistic and balanced.

Understanding regional variation in the use of local food in public catering

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Susanna Kujala ◽  
Outi Hakala ◽  
Leena Viitaharju
Keyword(s):  
Computable General Equilibrium ◽  
Regional Variation ◽  
Regional Differences ◽  
Local Food ◽  
Qualitative Comparative Analysis ◽  
Food Products ◽  
Content Type ◽  
Food Procurement ◽  
Public Catering ◽  
Food Share

PurposeThe main aim of this study is to identify the factors that can affect regional differences in the procurement of local food in public catering. Understanding how some regions procure more local food products than others could help promote the use of local food in public catering. Regions with a lower share of local food can learn from regions that have a higher local food share.Design/methodology/approachThe studied phenomenon is complex; therefore, we used several approaches to identify the share of local food procurement and the reasons behind the regional differences. The study gathered survey data and used fuzzy-set qualitative comparative analysis (fsQCA), a computable general equilibrium model and several data sources.FindingsThe share of local food within the total food procurement varies markedly between regions. The highest local food shares can be linked to a combination of three factors: sufficient and suitable supply, adequate organisational conditions and a political atmosphere that encourages the use of local food. In addition to limited political incentives, poor supply or inadequate organisational conditions effectively characterise why some regions use very few local food products. Hence, a move towards using more local food in public catering requires political decision makers, food producers and procurement personnel to demonstrate a common will and take cohesive action.Originality/valueBy examining regional variation, the results of this study offer a new perspective on the use of local food in public catering.

An econometric model of the determinants of private investment and a CGE model of the impact of democracy on investment and economic growth in Fiji

2008 ◽  
Vol 35 (12) ◽  
pp. 1017-1031 ◽  
Author(s):  
Paresh Kumar Narayan
Keyword(s):  
Computable General Equilibrium ◽  
Econometric Model ◽  
Private Investment ◽  
Cge Model ◽  
Content Type ◽  
Long Run ◽  
National Welfare ◽  
Investment Function ◽  
The Impact ◽  
Democratic Country

PurposeThe purpose of this paper is to construct an econometric model of the determinants of private investment with a particular focus on the impact of democracy on investment.Design/methodology/approachThe first step was to econometrically derive the long‐run elasticities; then to modify the Fiji computable general equilibrium (CGE) model to incorporate the investment function. Also the econometrically derived long run elasticities in the CGE model were used.FindingsIt was found that democracy has a positive and statistically significant impact on private investment in Fiji. The paper's simulation of Fiji becoming a fully democratic country on investment and other macroeconomic fundamentals, based on a CGE model, reveals that real gross domestic product and real national welfare increase by around 0.01 and 0.05 per cent, respectively; government savings and revenue performance improves; there is a trade balance surplus; and both private consumption and disposable income increase by around 0.05 and 0.12 per cent, respectively.Originality/valueThis is the first study that uses a CGE model to examine the impact of democracy, via investment, on other macroeconomic fundaments. No other study is known to have modelled democracy in a CGE framework.

scholarly journals The direct and indirect effect of cash transfers: the case of Indonesia

2018 ◽  
Vol 45 (5) ◽  
pp. 793-807
Author(s):  
Arief Anshory Yusuf
Keyword(s):  
National Economy ◽  
Rural Areas ◽  
Computable General Equilibrium ◽  
Value Added ◽  
Cash Transfers ◽  
Cge Model ◽  
Time Dimension ◽  
Content Type ◽  
Poverty And Inequality ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of unconditional cash transfers in Indonesia on poverty and inequality while, unlike much of the previous literature on the welfare impact of such transfers, acknowledging that they will have both a direct effect and an economy-wide effect on the national economy. Design/methodology/approach The methodology used is a Computable General Equilibrium (CGE) model of the Indonesian economy. The unique feature of this model, which is very relevant in this study, is the disaggregation of households by expenditure classes; this allows for precise estimation of the distributional impact and poverty incidence. Findings The results suggest that, despite a large reduction in poverty, particularly in rural areas, such transfers reduce the Indonesian GDP, especially if domestically financed through increasing the value added tax of all commodities. However, the GDP reduction can be reduced by approximately half when cash transfers are financed by reducing the distortionary fuel subsidy. Moreover, cash transfers financed by reducing the fuel subsidy also reduce inequality by much more than otherwise. Various extents of the distribution of the transfers are compared, from giving them to the poorest 10 percent to distributing them equally to all households. The benefit of the transfers, in terms of reduced poverty and inequality, is found to be smaller when the author extends the beneficiaries toward the non-poor, although the economy-wide cost, in terms of the reduced GDP, is smaller. Research limitations/implications The CGE model used in this model is a comparative-static model that does not explicitly model the time dimension, i.e. how the impact of the transfers evolves over time. This is important if we want to know the timing of the transfers and how and when they are translated into impacts. Practical implications To reduce the contractionary effect of cash transfers program, government/policy makers should carefully look for appropriate financing such as from removing subsidy with pre-existing distortions like fuel subsidies. Social implications Government needs to carefully design cash transfers to minimize the negative indirect (economy-wide) implication for the national economy and to make sure that the transfers reach the targeted beneficiaries. Originality/value Few previous studies have acknowledged the indirect economy-wide effect in analyzing the impact of cash transfers. To the author’s knowledge, this has never been done before for Indonesia. Unlike previous studies, this paper is unique as it contains sensitivity analysis on how transfers can be mistargeted and reach the non-poor and looks at the implications not only for poverty and inequality but also for the rest of the economy.

Can trade liberalisation bring benefits to the war-affected regions and create economic stability in post-war Sri Lanka?

2017 ◽  
Vol 44 (12) ◽  
pp. 1710-1726
Author(s):  
Athula Naranpanawa ◽  
Jayatilleke Bandara
Keyword(s):  
Sri Lanka ◽  
Computable General Equilibrium ◽  
Large Body ◽  
Political Stability ◽  
Trade Liberalisation ◽  
Cge Model ◽  
Sri Lankan ◽  
Content Type ◽  
Long Run ◽  
Post War

Purpose There is a large body of literature on the link between trade liberalisation, growth and poverty. However, less attention has been paid to the relationship between trade and regional disparities. The purpose of this paper is to identify and quantify the regional impacts of trade liberalisation, particularly in the war-affected regions and to understand to what extent trade reforms can contribute to the post-war recovery process and long-term economic and political stability in Sri Lanka. Design/methodology/approach The authors developed a single country multi-regional computable general equilibrium (CGE) model for the Sri Lankan economy to meet the need for a detailed country study as emphasised in the recent literature. Findings Both short-run and long-run results suggest that all regions including war-affected regions in the country gain from trade liberalisation, although gains are uneven across regions. Furthermore, the results suggest that war-affected regions gain more relative to some other regions in the long run. Originality/value According to the best of the authors’ knowledge within country regional impact of trade liberalisation using a multi-regional CGE model has never been attempted for Sri Lanka. The results of this study, even though based on Sri Lankan data, will be relevant to other developing countries engulfed in internal conflicts with regional economic disparities.

Mining booms and growth in Laos – empirical result from CGE model

2016 ◽  
Vol 15 (1) ◽  
pp. 51-61 ◽  
Author(s):  
Phouphet Kyophilavong
Keyword(s):  
Computable General Equilibrium ◽  
Design Methodology ◽  
Negative Impact ◽  
Value Added ◽  
Dutch Disease ◽  
Cge Model ◽  
Mining Sector ◽  
Content Type ◽  
The Impact ◽  
Practical Implications

Purpose This study aims to lay out a framework to quantify the impacts of mining booms on the macro-economy in Laos. Design/methodology/approach A computable general equilibrium (CGE) model is used to investigate the impact of the mining sector on the Laos’ economy by examining this sector’s increase in both stock and the productivity of capital. Findings It was found that higher capital stock and productivity lead to increased value added, production, exports and investment in the mining sector. These increases result in higher real gross domestic product, exports and investment. Unfortunately, the effects from the associated Dutch disease negatively impact real production and value added in the agriculture and industry. Suitable macroeconomic management and prudent administration of the windfall income from mining are therefore important. Practical implications The finding is important for policymakers to implement policy to deal with the negative impact of mining booms. Originality/value It is the first study to attempt to investigate the impact of the mining sector on the Lao economy using the CGE model. Second, we also provide recommendation to cope with the negative impact from mining booms which provide important implications for other developing countries that face the negative impact from mining booms.

Estimation of technical efficiency and output growth decomposition for small-scale rice farmers in Eastern India

2020 ◽  
Vol 10 (2) ◽  
pp. 139-156 ◽  
Author(s):  
Wei Wu
Keyword(s):  
Technical Efficiency ◽  
Decomposition Analysis ◽  
Output Growth ◽  
Small Sample ◽  
Small Scale ◽  
Rice Farming ◽  
Eastern India ◽  
Data Set ◽  
Content Type ◽  
Production Growth

Purpose The purpose of this paper is to estimate the degree of technical efficiency, determinants of technical inefficiencies and driving forces behind the production growth for a panel data set collected during the 1998/1999 and 2004/2006 Kharif cropping season, from 452 small-scale rice farming households in the Giridih and Purulia districts of Eastern India. Design/methodology/approach The estimations of technical efficiency utilize stochastic frontier production function with a sub-model of inefficiency effects at both aggregated farm level and disaggregated plot level where traditional varieties (TVs) and high-yielding varieties (HYVs) are differentiated. The output growth decomposition analysis identifies the main contributor to the total rice production growth. Findings The results indicate that the sampled farms are operated at moderate levels of technical efficiency. The production of HYV rice is associated with higher technical efficiency compared to TV rice. Farming experience, education attainment, landholding size, the share of non-agricultural income and the share of land in the lower terraces account for the differences in technical inefficiencies across the sampled farms. The decomposition analysis suggests that as technical efficiency decreased, technical change is the main source of production growth during the survey period. Research limitations/implications The small sample size applied in the analysis will result in an insufficient representativeness of the study area. Originality/value This paper fills the literature gap as estimations of technical efficiency that account for subtle differences in adopted rice varieties are still rare in India.

Testing one developed model by the parametric control theory methods

Kybernetes ◽  
2015 ◽  
Vol 44 (6/7) ◽  
pp. 1094-1106
Author(s):  
Abdykappar Ashimov ◽  
Yuriy V. Borovskiy
Keyword(s):  
Control Theory ◽  
Computable General Equilibrium ◽  
System Analysis ◽  
Numerical Algorithms ◽  
Control Problems ◽  
Cge Model ◽  
Practical Application ◽  
Content Type ◽  
Macroeconomic Models ◽  
Parametric Control

Purpose – The purpose of this paper is to demonstrate an effectiveness of applying a number of the new methods, proposed in the parametric control theory for testing macroeconomic models for the possibility of their practical application. Design/methodology/approach – Approaches of system analysis on building and calibrating the mathematical models; provisions of the parametric control theory for both numerical testing of the calibrated models for the possibility of their practical application and solving the parametric control problems. Findings – First, one global computable general equilibrium model (CGE model) is built and calibrated. Second, in solving the problem of testing this model for the possibility of its practical application the effectiveness of applying two developed numerical algorithms is demonstrated. These algorithms are for estimating stability indicators and estimating stability (in the sense of the theory of smooth mappings stability) of mappings defined by the model. Third, on the base of the tested CGE model there are given the solution results for a number of the parametric control problems aimed at economic growth and decrease of economic disparities of regions. Originality/value – By the example of the developed CGE model, it is demonstrated an approach of the parametric control theory for testing macroeconomic models for the possibility of their practical application.

scholarly journals Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

2019 ◽  
Vol 16 (2) ◽  
Author(s):  
Suriyani Binti Saidi ◽  
Mukaramah Binti Harun ◽  
Norrazman Zaiha Bin Zainol
Keyword(s):  
General Equilibrium ◽  
Policy Analysis ◽  
Computable General Equilibrium ◽  
Research Work ◽  
Future Research ◽  
Cge Model ◽  
Government Revenue ◽  
Model Framework ◽  
Cge Models ◽  
The Impact

Computable general equilibrium (CGE) models have been widely used in economic policy analysis in recent years. The selection of the model is based on the CGE model’s ability to see the effects on sectors, household groups, governments, and even able to see the overall economic impact for a time period. In Malaysia, the issues arise from the impact of policies analysed in the CGE modelling framework have been constrained in part by the completion of a Social Accounting Matrix (SAM). The main purpose of this paper is to propose a new Malaysian CGE model framework to analyse the impact of implementation of GST on government revenue and welfare of targeted household groups of B40 and M40 in Malaysia. The CGE model developed in the present paper is based on more recent data in Malaysian SAM (2014). Then the data was modified to suit with Malaysian CGE for GST, namely the MYGST_CGE model. This paper describes the structure of MYGST_CGE, with 33 activities, 33 commodities, 7 types of labour, and 7 categories of household groups were constructed. The CGE utilized in the present study can be applied to answer questions concerning whether GST implementation would have the trade-off between government revenue and the targeted groups by taking into account the elements of GST such as standard-rate, zero-rate and exempted rate. For the purpose of policy analysis, simulation exercises are conducted using the multi-sectoral, multi-factorial and multi-households approach. Based on the proposed framework model review, the instruments used for measurement of effectiveness and welfare were C-efficiency ratio, regressive, progressive, equivalent variation and simulations. The paper will give an opportunity for future research work in a related area.  

The effects of Paris agreements on Korean economy and trade analyzed by the computational general equilibrium method considering firm’s heterogeneity

2018 ◽  
Vol 22 (3) ◽  
pp. 280-305
Author(s):  
Jae-whak Roh ◽  
Hyunjae Kim
Keyword(s):  
General Equilibrium ◽  
Economic Impact ◽  
Computable General Equilibrium ◽  
Carbon Emission ◽  
Electricity Price ◽  
Cge Model ◽  
Content Type ◽  
Korean Economy ◽  
Reduce Carbon Emission ◽  
Paris Convention

Purpose During the Paris Convention, Korean Government made commitment to curb carbon emission by 37 percent by the year of 2030. Since then there has been constant debate, both in media and academia, as to whether attempts to reduce carbon emission would spell the concomitant economic slowdown. The purpose of this paper is to build a Computable General Equilibrium (CGE) model to see the effects of emission decrease on Korea economy. Design/methodology/approach To answer the above question, we build a comprehensive framework to gauge the economic impact of Paris Convention through the lens of Computable General Equilibrium (CGE) model using Armington and Melitz model. Findings Contrary to conventional wisdom, Korea’s economic performance in terms of welfare remains robust when the carbon emission is reduced. Broadly speaking, Korea’s welfare does not contract significantly in part due to expansion at the export market. For instance, the energy intensive industry (EIT) is affected most directly from the Paris Convention commitment and yet it experiences growth in export. On the contrary, the authors find that the general economic impact on Korea’s output is negative. The additional experiment using Melitz model shows that as the carbon reduction is enforced, both the number and the average productivity of the exporting firms increase in the EIT sector, which the authors refer in the paper as the “Melitz Effect.” Practical implications This paper shows that what can be occurred in Korean industries by emission decrease commitment. Social implications One byproduct from restricting carbon emission is the surge in the electricity price. This is due to the fact that industries have to shift away from traditional fuels such as oil to electricity for energy. Therefore the authors propose that industrial policies aimed at balancing electricity price should accompany the plan to reduce carbon emission. Originality/value For Korean economy, the effects of emission reduction is researched using Armington and Melitz model at the same time. Especially, this is the first research case using the Melitz model in this Korean topic.

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